GPB/USD : Near Resistance
(Mon, 13 July 2020). GBP/USD eyes multi-week highs but resistance nears. A busy economic calendar, both home and abroad, may spark volatility.
A very busy week ahead for traders with a raft of heavyweight economic data, monetary policy decisions and the start of the US earnings season all potential areas of volatility. In the UK, the latest look at GDP, inflation and employment will keep Sterling traders on their toes, while central bank decision from the Bank of Japan, the Bank of Canada and the European Central Bank will move relevant GBP-crosses. In addition, the latest round of EU/UK trade talks will continue this week with little in the way of compromise between the two sides seen as yet. Both sides continue to cite ‘significant differences’ with the UK saying that they want talks to finish by autumn ‘at the latest’ to give UK companies clarity and allow them to be ready for January 1, 2021.
GBP/USD continues to benefit from a weak US dollar and has added nearly four big figures from the end of June. At the end of last week and early today, the pair neared the 200-dma but swiftly turned lower. The longer-dated moving average has capped GBP/USD upside since early-March with the intra-day break above the 200-dma on June 10 quickly reversed. The CCI indicator suggests that the recent rally is now overdone and the pair may fade lower into the UK GDP, and manufacturing and industrial production, release on Tuesday.
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