The GBP/USD is continuing to consolidate in a very tight range right around 1.5360 after having recently pushed through the 1.53 level and moved to within a whisker of 1.54. After having done very little for about a week, the couple of days to finish out last week and the start of this week have seen the GBP/USD surge higher and move through the 1.52 and 1.53 levels to a three week high just short of 1.54. It is presently trading just above 1.5350 and is looking to place buying pressure on 1.54. For the most part a couple of weeks ago, it moved very little as it found solid support at 1.51 and traded within a narrow range above this level. It eased off a little as well and established a trading range in between 1.51 and 1.52 after it took a breather from its excitement from couple of weeks ago when it experienced a strong surge higher moving back to within reach of the 1.52 level before easing off a little and then rallying a off support at 1.5080.
A few weeks ago it did well to climb off the canvas and move back above 1.49 and towards 1.50 again before seeing the pound reverse and head back down below 1.49 to reach a new multi-year low near 1.48. Earlier this month, it experienced sharp falls moving from 1.53 down to the key long term level of 1.50 and then through 1.49. This recent movement saw it resume its already well established medium term down trend from the last few weeks and move it to a four month low. Over that month, it moved back from above 1.57 and fell strongly, only to see it recover very well over the last few weeks.
Throughout the first half of June, it enjoyed its best run in a long time as it surged from 1.50 to 1.57 in just a few weeks. Its multiple key levels during its movement up towards 1.57 have appeared to have little impact during its recent decline, although 1.52 seemed to halt the decline a little a couple of weeks ago. This level has resurfaced again and provided further resistance after the pound’s surge higher last week. With the exception of last week’s surge higher, the pound has completely reversed its fortunes from the strong first half of June which saw it climb so strongly from 1.50 up to the four month highs above 1.57. Throughout the month of May the pound fell strongly and return almost all of its gains from the few weeks before that. In early March the pound moved to new lows around 1.4830 from a starting point near 1.64 at the beginning of the year.
The British pound has dazzled the markets, gaining about five cents in the past two weeks against the retreating US dollar. However, some context is important, as the pair has only recovered about half of its losses which resulted from a terrible slump that started in mid-June. At that time, the pound was enjoying the view below, as it traded in the mid-1.57 range. On Tuesday, BBA Mortgage Approvals climbed from 36.1 thousand to 37.3 thousand. This was the important housing indicator’s best showing since February 2012. However, the markets wanted more, as the estimate stood at 38.5 thousand. Despite falling short of the forecast, the indicator has now risen over four consecutive releases, pointing to stronger activity in the UK housing market.
GBP/USD July 24 at 00:40 GMT 1.5373 H: 1.5392 L: 1.5326
During the early hours of the Asian trading session on Wednesday, the GBP/USD is just easing back a little towards 1.5350 after having recently pushed through to within reach of 1.54. Since the middle of June the pound has fallen very strongly from the resistance level at 1.57 back down towards the long term key level at 1.50 and is now enjoying a solid recovery over the last few weeks. Current range: Right around 1.5360.
Further levels in both directions:
• Below: 1.5100 and 1.4850.
• Above: 1.5400.
(Shows the ratio of long vs. short positions held for the GBP/USD among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)
The GBP/USD long positions ratio has just eased below 50% as the GBP/USD has pushed higher and moved through the 1.53 level. Trader sentiment shifts to in favour of short positions, but only just.
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