GBP/USD extended the bullish momentum for the third consecutive session taking advantage of tripping US dollar yesterday. US Dollar opened yesterday with a strong tone with an upward gap, then rallied further more with a 101.60 high but failed to withhold strong gains as the US Index plunged to 101.22 today in early morning sessions. GBP/USD clocked a high today at 1.2508, struggling to hold the 1.25 level as the pair trades 1.2501 intraday.
Yesterday, analysts at Scotiabank mentioned that the UK public sector net borrowing data showed a surplus of 9.4B Pound in January, the largest for the month since at least 2001. BOE Gov. Carney crossed wires yesterday stressing that last week's CPI 1.8% overpass was justified by a weaker GBP and that wages were key to how much tolerance the BoE had for above target inflation. The governor cautioned that the BoE had perhaps been “over-predicting” wage growth, which suggests no rush to react to the inflation push..."
GBP Fundamentals
1- Second Estimate GDP q/q at 9:30 AM GMT.
USD Fundamentals
1- FOMC meeting minutes tonight at 7:00 PM GMT
2- Unemployment claims tomorrow at 1:30 PM GMT.
Technical levels to watch :
Trend : Bullish Sideways
Daily Pp : 1.2451
Resistance levels : R1 1.2521, R2 1.2574, R3 1.2647
Support levels : S1 1.2445, S2 1.2382, S3 1.2312
Remark : look forward for UK GDP today. Also FOMC meeting tonight and US data tomorrow will decide USD levels. A penetration for S1 level is a negative sign for the cable with increase of additional selloffs and wash towards S2 level. Closing above R1 level will confirm the bullish momentum and spark additional attacks toward R2&R3 levels.
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