GBP/USD Stares Down 8/13 Highs After Positive EU and U.S. Data
The Cable is moving higher after EU PMI and U. S. Existing Home Sales data surpassed analyst expectations. The S&P futures are setting new 2009 highs while the EUR/USD tests some important technical barriers to the topside. However, the GBP/USD is only participating partially since investors are still sour about the level of debt in Britain.
Furthermore, this has been a relatively light week data-wise for the UK, giving investors less incentive to be bullish on the Pound after the surprising details of the BOE’s meeting minutes. The Cable is participating nonetheless, since a breakout in the S&P futures is certainly positive for the concept of a global economic recovery. Meanwhile, we noticed investors started snapping up the USD/JPY after the U. S. Existing Homes Data, showing us investors are dipping their toes back into risk. This is positive for the GBP/USD’s near-term outlook since the Pound should be considered a riskier currency at the point in time.
Despite today’s breakout in the S&P futures and the GBP/USD’s tilt upwards, the currency pair still faces our 3rd tier downtrend line and August 13th highs. The GBP/USD will likely need some solid backing volume-wise to get past these two technical obstacles. The currency pair continues to gravitate towards its psychological 1.65 range, and is stuck in a consolidative mindset right now. However, the GBP/USD’s near and medium-term slopes are positive, giving us reason to believe momentum ultimately lies in favor of the bulls. Meanwhile, the Cable has our 1st and 2nd trend lines to fall back on along with intraday and 8/19 lows. Britain’s economic data will get a little more active next week, beginning with Nationwide HPI on Monday.
Present Price: 1.6517
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