8 Jul 2015
GBP/USD: FOMC muted, bears targeting 1.5170
FXStreet (Guatemala) - GBP/USD is currently trading at 1.5361 with a high of 1.5468 and a low of 1.5328.
GBP/USD is slightly bid on the FOMC minutes while the greenback is softer.
There was very little market reaction while it was stated that a number of Fed officials warned against a premature rate rise as Fed officials gave a number of reasons for caution over the outlook. Greece and China were mentioned as key risk factors. Meanwhile, there is some speculation that the BoE may need start raising interest rates, however, analysts at Rabobank explained, "This arguments still holds. However, commodity prices in general are still soft. Supply gluts and weak Chinese growth remain as dark clouds over the outlook for many commodity prices. Combining this with sterling strength means lower for longer UK inflation projections and therefore the Bank may not need to hike rates for some months yet...we favour a slight moderate in GBP/USD towards 1.52 on a 3 mth view."
GBP/USD technically bearish
Technically, the outlook remains bearish. Analysts at UOB Group explained that the 1.5440 target that was first indicated on Monday was met with an overnight low of 1.5413. "Strong and impulsive downward momentum suggests that the current down-move could continue to accelerate lower to the next support at 1.5245 followed by 1.5170 (low in late May). The stop-loss level for our bearish view is currently at 1.5570 (from 1.5740 yesterday)."
GBP/USD is slightly bid on the FOMC minutes while the greenback is softer.
There was very little market reaction while it was stated that a number of Fed officials warned against a premature rate rise as Fed officials gave a number of reasons for caution over the outlook. Greece and China were mentioned as key risk factors. Meanwhile, there is some speculation that the BoE may need start raising interest rates, however, analysts at Rabobank explained, "This arguments still holds. However, commodity prices in general are still soft. Supply gluts and weak Chinese growth remain as dark clouds over the outlook for many commodity prices. Combining this with sterling strength means lower for longer UK inflation projections and therefore the Bank may not need to hike rates for some months yet...we favour a slight moderate in GBP/USD towards 1.52 on a 3 mth view."
GBP/USD technically bearish
Technically, the outlook remains bearish. Analysts at UOB Group explained that the 1.5440 target that was first indicated on Monday was met with an overnight low of 1.5413. "Strong and impulsive downward momentum suggests that the current down-move could continue to accelerate lower to the next support at 1.5245 followed by 1.5170 (low in late May). The stop-loss level for our bearish view is currently at 1.5570 (from 1.5740 yesterday)."