GBP/USD for Tuesday, October 22, 2013
In the last couple of days of last week the GBP/USD surged higher from the key level at 1.60 to move back to close to 1.6250 before easing back. To start this week the pound consolidated in a narrow range just above 1.6150 before easing back below in recent hours. Throughout September the pound rallied well and surged higher to move back up strongly through numerous levels which was punctuated by a push through to its highest level for the year just above 1.6250 a few weeks ago. For the last couple of weeks however it has been easing back towards 1.60 and 1.59 where it established a narrow trading range between before the recent surge higher to finish last week. For a period of about a week it was relying on support from 1.5950 which allowed it some time to consolidate a little. Several weeks ago it first found solid support from the 1.5950 level which helped it move well up to the 1.6250 level. It did stall around 1.59 to 1.5950 for a few days a few weeks ago before clearing this area of congestion. About a month ago it fell down to a two week low near 1.54 before rallying back towards 1.5550. The week before it did well to maintain its level above the key 1.56 level and in the process moving to a new two month high above 1.57 which has now been surpassed by the recent high. It immediately retreated strongly but continued to receive solid support from the 1.56 level before closing below at the end of that week.
Back in the middle of August the pound surged higher to through the resistance level at 1.56 to a then two month high around 1.5650, before spending the next few days consolidating and trading within a narrow range around 1.5650, receiving support from the key 1.56 level. A couple of months ago the resistance level at 1.54 was proving to be quite solid, and once it broke through the pound surged higher to a new seven week high near 1.56 in a solid 48 hour period run. In the week leading up to this the pound had recovered strongly and returned to the previous resistance level at 1.54 after the week earlier undoing some of its good work and falling away sharply from the resistance level at 1.54 back down to around 1.5150 and a two week low. A few weeks ago the 1.54 resistance level stood firm and the pound fell away heavily, however the 1.51 support level proved decisive and helped the pound rally strongly.
Earlier in July after having done very little for about a week, the GBP/USD started to move and surge higher and move through the 1.52 and 1.53 levels to the one month high above 1.54. Prior to the move higher, it moved very little as it found solid support at 1.51 and traded within a narrow range above this level. It established a trading range in between 1.51 and 1.52 after it took a breather from its excitement just prior when it experienced a strong surge higher moving back to within reach of the 1.52 level from below 1.49, all in 24 hours. About a month 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. It experienced sharp falls moving from 1.53 down to the key long term level of 1.50 and then through 1.49. That movement saw it resume its already well established medium term down trend from the second half of June and move it to a four month low.
The pound enjoyed superb gains last week, and UK economic releases were part of the reason. British Retail Sales, a key consumer spending event, looked solid on Thursday and has helped the pound post sharp gains against the dollar. The indicator bounced back from a decline in August and posted a gain in 0.6% for September, edging past the estimate of 0.5%. This strong reading comes on the heels of a spectacular Claimant Count Change release, which dropped to a sixteen-year low.GBP/USD Daily Chart" title="GBP/USD Daily Chart" src="https://d1-invdn-com.akamaized.net/content/pic9542b960b8962c14a7ec00666ddd8ab1.gif" height="241" width="550">
GBP/USD October 22 at 03:20 GMT 1.6120 H: 1.6181 L: 1.6123GBP/USD Technical" title="GBP/USD Technical" src="https://d1-invdn-com.akamaized.net/content/pic45a28c2fe882d2d8a6775007e2aa32bd.png" height="120" width="440">
During the early hours of the Asian trading session on Tuesday, the GBP/USD is just easing back below the 1.6150 level that it has spent some time around for the last few days. 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 resurgence over the last couple of months moving back to above 1.62 and its highest point for the year. Current range: Just below 1.6150.
Further levels in both directions:
• Below: 1.5950 and 1.5800.
• Above: 1.6150 and 1.6250.
OANDA’s Open Position RatiosGBP/USD Open Position Ratios" title="GBP/USD Open Position Ratios" src="https://d1-invdn-com.akamaized.net/content/pic13ff4f63c7461859d071f7d5a17f173f.gif" height="60" width="544">
(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 moved back up a little from 20% as the GBP/USD has eased back below 1.6150. Trader sentiment remains heavily in favour of short positions.
Economic Releases
- 08:30 UK Public Borrowing (PSNB ex interventions) (Sep)
- 12:30 CA Retail Sales (Aug)