The GBP/USD is presently resting right up against the resistance level at 1.54 after having recently surged higher towards that level and poked its head above for a brief time moving beyond 1.5430. Earlier last week it was sold off after running into the wall of supply at 1.54 however it has now reversed and moved to a new one month high to finish last week. After having done very little for about a week, a couple of weeks ago 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. 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 a few 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.
U.K. economic growth probably accelerated in the three months through June as Britain posted its first consecutive quarters of expansion in almost two years. Gross domestic product increased 0.6 percent from the first quarter, when it rose 0.3 percent, according to the median forecast of 37 economists in a Bloomberg News survey. That would mark the first back-to-back period of growth since 2011. The Office for National Statistics will publish the data at 9:30 a.m. in London today. Reports this month showed improvements in retail sales, the labor market and house prices, suggesting consumers are driving the economy’s escape from recession. The Bank of England will outline next month its policy on forward guidance as new Governor Mark Carney looks to help sustain the rebound.
GBP/USD July 29 at 00:45 GMT 1.5392 H: 1.5399 L: 1.5378
During the early hours of the Asian trading session on Monday, the GBP/USD is resting right up against the resistance level at 1.54 after having surged higher towards that level and poked its head above for a brief time moving beyond 1.5430 last week. 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 1.5390.
Further levels in both directions:
• Below: 1.5300, 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 towards 1.54. Trader sentiment remains in favour of short positions.
Economic Releases
- 06:00 UK Nationwide House Prices (29th-2nd) (Jul)
- 08:30 UK BoE – Mortgage Approvals (Jun)
- 08:30 UK BoE – Net Consumer Credit (Jun)
- 08:30 UK BoE – Secured Lending (Jun)
- 08:30 UK M4 Money Supply (Jun)
- 08:30 UK BSA Mortgage Statistics (Jul)
- 10:00 UK CBI Distributive Trades (Jul)
- 14:00 US Pending Home Sales (Jun)