Subscribe to RSS

GBP/USD Forecast: Bullish above 1.5113, No BOE liftoff in 2016?

GBPUSD

The GBP/USD pair flirted with 1.5202 in Europe before falling to 1.5113 levels after the Bank of England left the key rates unchanged and maintained the dovish tone intact. The vote count remained unchanged at 8-1 and the bank noted a slight slowdown in the nominal pay growth.

Key Takeaways from Thursday

The markets continue to ignore the worsening UK trade deficit. The UK current account to GDP ration hit record lows for last three years and appears on track to do the same this year as well.

The Bank of England is no longer tagging along with the Fed. The BOE policy statement and minutes carried the dovish tone, which was widely expected, despite which the Sterling fell 80 pips. The action in Sterling indicates the traders were expecting the BOE to turn a little hawkish, given that the Fed liftoff is pretty much a done deal.

No BOE liftoff in 2016?

The odds of BOE liftoff are falling each passing day (low inflation, UK trade deficit). Markets were expecting that the BOE would lift rates in Q3 2016. However, a bigger threat is unfolding –

  • UK miners/energy firms may add to unemployment – Aprox. 5,500 jobs have already disappeared in the North Sea oil sector. The Mining heavyweight Anglo American also cut 85,000 jobs. With a little/no scope for recovery in commodity prices, the situation could easily worsen. Miners/energy firms can withstand low commodity prices only if the domestic consumption spikes in response to low prices. However, consumption is anaemic and thus BOE could be forced to delay its liftoff further out in 2016 or in 2017.

Eyes on US retail sales

As for today, a better-than-expected US retail sales could trigger a USD rally, while a weaker print could hurt USD, but is unlikely to have any impact on the Fed rate hike probability. At the most, ta horribly weak number could mean the fed rate hike next week will be far lower than the conventional 25 bps move.

Technical – Flirting with trend line support

  • The pair failed to continue its bullish bias yesterday and fell to 1.5113, but managed to end above the falling trend line (blue)
  • As of now the spot is flirting with the trend line. A break below would bring in support at 1.5113 (23.6% of 1.5819-1.4895).
  • Wednesday’s daily close above 1.5159, followed by Thursday’s rebound from 1.5113 and close above the trend line (blue) indicates a drop to 1.5113 today is likely to be followed by a re-test of 1.52 levels.
  • A convincing break above 1.52 would open doors for 1.5248 (50% of Apr-Jun rally+38.2% of 1.5819-1.4895).

EUR/USD Analysis: Back below 1.10, for how long?

EURUSD

The EUR/USD fell back below 1.10 on Thursday as hopes of the Fed liftoff next week supported the greenback. The shared currency fell from the one-month peak of 1.1044 seen on Wednesday to 1.0925 in the NY session yesterday. At the moment, the pair is trading around 1.0940 levels.

Focus on US data

The US advance retail sales, if horribly weak, could push the EUR/USD pair back above 1.10 levels. However, the upside could be restricted around Wednesday’s high as the horribly weak figure would not hurt Fed rate hike bets. What it could do is force the markets to think about a minor liftoff – 10bps or 12.5bps.

On the other hand, a better-than-expected number could reignite the USD rally and push the EUR/USD pair below key support at 1.0890. The Eurozone final CPI figure for November could turn out to be a non-event for the markets unless it is revised significantly higher/lower.

Technicals – Re-test of 1.10 likely above 50-DMA

  • The intraday bias in the EUR/USD ran out of steam on Thursday, but bulls remain in control above 1.0890 (38.2% of 1.1495-1.0517).
  • A break above 50-DMA at 1.0947 would open doors for a re-test of 1.10 (trend line resistance).
  • Meanwhile, a break below 1.0890 (38.2% of 1.1495-1.0517) would expose 1.0808 (July 20 low).

0 commentsback to post

Add your comment

Nickname:
E-mail:
Website:
Comment:

Other articlesgo to homepage

Free $30 Earn Trade-able Trading Credit Bonus – Forex Time

Free $30 Earn Trade-able Trading Credit Bonus – Forex Time(0)

Switch to ForexTime and Free $30 Earn Trade-able Trading Credit Bonus. Join the hundreds of thousands of traders around the world who have already chosen ForexTime as a broker and Free Earn $30 Trade-able Trading Credit Bonus as a thank you for switching. Link:  Receive $30 Tradeable Credit Bonus Link:  Loyalty Cashback Promotions Link:  FX

$100 Risk Free Money on your Live Account – FidelisCM

$100 Risk Free Money on your Live Account – FidelisCM(0)

Get $100 Free Risk Forex Money on your Live Account There is no better way to trust more. Sign up for $100  No Deposit Bonus from FidelisCM Live Account and start forex trading now. Link: $100 Free No Deposit Forex Bonus Link: 200% Margin Bonus on all Deposit Available to: New and Existing clients Ending

$14000 New Accounts Bonus on Initial Deposits – AvaTrade

$14000 New Accounts Bonus on Initial Deposits – AvaTrade(0)

Up to $14000 New Accounts Bonus on your Initial Deposits to all new trading account. Open a new live trading account and verify it Make a deposit of no less than $100 and request the New Accounts Bonus. Link:  100% Bonus to Your First Deposit Link:  30% Sign-up Bonus on your Deposit Link:  Up to

Up to 200% Withdrawable Cashback Bonus – Forex Time

Up to 200% Withdrawable Cashback Bonus – Forex Time(0)

Always aims for profitable promotions for FXTM Customer, this time they have come up with a 200% Cashback Rebate Bonus promo which enables traders to earn up to 10,000 USD withdraw able Cashback bonus. Link:  Receive $30 Tradeable Credit Bonus Link:  FX Circuits Live Trading Contest Link:  Demo Forex Trading Contest Link:  Loyalty Cashback Promotions

$2500 Forex No Deposit Free Startup Bonus – InstaForex

$2500 Forex No Deposit Free Startup Bonus – InstaForex(0)

$2500 Free No Deposit Forex Bonus to Start Risk Forex Trading on InstaForex.com‎. With $2500 Free Forex Bonus you will be able to estimate our unsurpassed quality of order execution in live trading conditions with no risk and personal investments. Link:  Up to $5000 No Deposit Free Bonus Link:  $500 Forex No Deposit Free Bonus

100% Special Bonus Offer on a Deposit – World Forex

100% Special Bonus Offer on a Deposit – World Forex(0)

Get a 100% Special Bonus Offer on a Deposit plus for replenishment account And a free VPS server for every account replenishment in the amount of 100 USD. Link:  $10 No Deposit Forex Special Bonus Link:  Deposit $5 Receive $20 Special Bonus Link:  100% Forex Special Deposit Bonus Available to: All new trading account Ending

50 USD Forex No Deposit Bitcoin Bonus offer – UFX

50 USD Forex No Deposit Bitcoin Bonus offer – UFX(0)

$50 Forex No Deposit Bonus on their real account. This initial $50 Forex No Deposit Bonus offer is intended to allow new users of the platform the opportunity to test the real trading account. Link:  $50 No Deposit Bonus Promotion Link:  $50 Free No Deposit Bitcoin Bonus Link:  100% Real Money CashBack Promotion Available to:

Deposit $5 Receive $20 Forex Special Bonus – WForex

Deposit $5 Receive $20 Forex Special Bonus – WForex(0)

$10 Forex No Deposit Free Bonus or Deposit $5 Receive $20 Special Bonus Forex to all World Forex New Clients only. Trade with World Forex Broker Get 20$ or 10$ on your choice Link:  $10 Forex No Deposit Free Bonus Link:  Deposit $5 Receive $20 Special Bonus Available to: All new trading account Ending Date:

25 USD Receive Forex Cash Bonus for Free – Xtrade

25 USD Receive Forex Cash Bonus for Free – Xtrade(0)

$25 Receive Forex Cash Bonus for Free No deposit required to all Xtrade New Clients only and 60% Forex Deposit Bonus on your first time deposit to all new live trading account Link:  Up to $5000 No Deposit Free Bonus Link:  $500 Forex No Deposit Free Bonus Link:  $1000 Forex No Deposit Free Bonus Link: 

50% Deposit Bonus for Every Deposit – Fort Financial

50% Deposit Bonus for Every Deposit – Fort Financial(0)

Up to 50% Deposit Bonus for Every Deposit. Open and fund an account at FortFS.com and receive an exclusive 50% bonus on top of your initial investment up to $1000. Link: Up to 50% Bonus of Every Deposit Link: $5 Forex No Deposit Welcome Bonus Link: 15% Support Margin Bonus Available to: New and Existing

read more

Forex Featured Broker

Contacts and information

ForexDepositNews.com Forex Deposit Bonus, Forex No Deposit Bonus, Forex Live Contest, Forex Demo Contest, Free Forex Bonus Forex Brokers Review and Other All Forex promotions.

ForexDepositNews.com

Social networks

Most popular categories