16 Jul 2014
GBP/USD technically range bound - Scotiabank
FXStreet (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank said that GBP/USD is flat, failing to react to a strong unemployment report due to a lack of earnings growth and a broader USD rally.
Key Quotes:
"The May unemployment report suggests an ongoing firming in the UK labour market with 254k jobs added 3m/3m and a drop in the unemployment rate to 6.5%; however average weekly earnings only increased 0.3% well under the recent pace and below expectations. In the near‐term GBP is at risk of further upside, likely testing above 1.72, on the back of the economic and monetary backdrop; however into year‐end these gains should fade, bring GBP back to 1.70 as the market gets comfortable with a subdued pace of interest rate tightening."
"GBP/USD short‐term technicals: mixed—technicals are failing to confirm each other leaving the technical outlook as range bound. Support lies at the recent low of 1.7060 and resistance at the recent high of 1.7192."
Key Quotes:
"The May unemployment report suggests an ongoing firming in the UK labour market with 254k jobs added 3m/3m and a drop in the unemployment rate to 6.5%; however average weekly earnings only increased 0.3% well under the recent pace and below expectations. In the near‐term GBP is at risk of further upside, likely testing above 1.72, on the back of the economic and monetary backdrop; however into year‐end these gains should fade, bring GBP back to 1.70 as the market gets comfortable with a subdued pace of interest rate tightening."
"GBP/USD short‐term technicals: mixed—technicals are failing to confirm each other leaving the technical outlook as range bound. Support lies at the recent low of 1.7060 and resistance at the recent high of 1.7192."