Key levels for a bullish GBP/USD: Friday's LIVE GBP Coverage
The British Pound Sterling (GBP) is enjoying positive momentum amidst a vacuum of UK data; we predict we will see a decent close to the week for the currency.
Keep watching the 1.2 level against the EUR; a close above which could mean the GBP/EUR is finally ready for a higher range. GBP/AUD is another currency pair worth watching as the AUD complex comes under sustained pressure.
Latest FX rates
- The pound to euro exchange rate is 0.26 pct down on last night at 1.1986.
- The pound to US dollar rate is 0.1 pct higher at 1.6200.
- The pound to Australian dollar rate is 0.56 pct higher at 1.7640.
- The pound to New Zealand dollar rate is flat at 1.9745.
Please note that all quotes here are taken from the inter-bank markets. Your bank will levy a discretionary spread when delivering you forex. However, an independent currency specialist will seek to undercut your bank's offer, thus delivering up to 5% more FX. Please learn more here.
14:06: Return trade lower for GBP/USD
"GBP Managed a small scale rally this am. after an overnight bearish lean but upside has been restrained- market is tending to be sold just above 1.6205 and - although no clear top is in place yet - a return trade lower here this PM. presently has a projection to 1.6150." - FX Market Alert.
13:41: Independent Scotland would be expelled from Sterling-zone
Alistair Carmichael, the Scottish secretary, has warned tat should Scotland become an independent state it would have to cease using the British pound.
“George Osborne has said in terms it is highly unlikely. Most people in Whitehall understand that if George Osborne says something is highly unlikely, it is not going to happen,“ said Mr Carmichael.
Asked if he shared the view that an independent Scotland would be excluded from sterling, Mr Carmichael replied “Yes.”
12:36: Test of the key resistance at 1.6260 likely
Luc Luyet at MIG Bank confirms sentiment towards the GBP vs USD pair remains bullish:
"GBP/USD moved sharply higher yesterday, negating the fear of a potential waning buying interest. A test of the key resistance at 1.6260 is likely.
"An initial support can be found at 1.6109 (intraday low, see also the rising channel). Another support can be found at 1.6073 (21/11/2013 low).
"In the medium-term, prices are moving within the horizontal range defined by the support at 1.5894/1.5855 and the resistance at 1.6260 (01/10/2013 high)."
11:43: Key levels to watch out for
Ipek Ozkardeskaya at Swissquote Research on the key support and resistance levels for a bullish GBP/USD:
"GBPUSD surged above key resistance at 1.6125 peaking at 1.6219. MACD is now stabilising above the zeroline and clearance of supply at 1.6125 should provide potential for further bullish rally.
"On the downside the 21-DMA at 1.6068 should provide support to the current sell-off. Watch for next resistance to come into play at 1.6270 (1st Oct high) then 1.6343 (2013 high).
"The support levels from here are 1.6068 (21- DMA), 1.6045 (downtrend top), 1.5884 (13th Sep high), 1.5759 (17th June high), 1.5708 (fibo 61.8% on Jul-Oct rally), 1.5600 (resistance turned support) then 1.5429 (28th Aug low)."
10:35: Fresh bout of EUR strength being seen
The euro is outpacing the British pound, US dollar and other G10 majors on the back of some good news from the IFO.
Boris Schlossberg at BK Asset Management notes:
"The EUR/USD regained the 1.3500 level in early European trade after the IFO survey of business sentiment posted its best reading in more than a year indicating that business activity in Eurozone's largest economy remains robust. The IFO printed at 109.3 - much better than the 107.7 eyed with current conditions rising to 112.2 vs. 116 forecast while expectations increased to 106.3 versus 104 projected."
09:53: Playing Cable
More from Lee who picks the GBP/USD as his trade of the day:
"Look for a test of 1.6250/60 later today in cable. Play it from the long side, expecting support near 1.6140 to emerge during Asia and a move higher to eventuate during European trade."
09:47: GBP/AUD keeps Aus dollar complex heavy
Trader Sean Lee at FXWW is beginning to doubt whether the Australian dollar will be able to bounce back:
"The big break in the AUD crosses has certainly clouded my AUD/USD buy-dips view. If pairs like GBP/AUD continue to move higher then AUD/USD will remain heavy. Nevertheless, after a 250 pip fall this week I’m of the opinion that it’s fallen far enough. Play an intraday .9200/80 range with a bullish bias."
09:02: Momentum predicted to take GBP higher vs the US dollar
"In UK, the hawkish BoE expectations reinforced the bull momentum in GBP-complex. GBPUSD rallied to 1.6205. Resistance should come into play at 1.6255/60 (upper Bollinger band /October double top) while option bids above 1.6100/50 are to keep the downside limited. EURGBP extended weakness to 0.83167 in Asia, a stone’s throw higher than our 0.8300 target." - Ipek Ozkardeskaya at Swissquote Research.
08:55: Favour euro underperformance vs the British pound (GBP)
Lloyds Bank see the GBP outperforming the euro:
"GBP was helped higher following the strong CBI Survey yesterday but Draghi’s comments helped support EUR. We still favour the EUR underperformance against GBP, however in the absence of any dovish news from the Euro Area and with little on the UK calendar today, we expect 0.8300 to provide decent support."
08:45: Prospects for the euro
We keep an eye on the GBP/EUR as it flirts with the 1.2 level.
There is a lack of substantial UK economic news on hand today so we continue to watch for broader euro weakness; particularly in the EUR/USD pair.
"Mixed EMU PMI surveys failed to unsettle the euro yesterday and prospects of a stronger Ifo reading today may help EUR-USD recover further. Yet, the bullish USD market tone after the release of the FOMC minutes is likely to keep the EUR on the soft side in the near term." - UniCredit Bank.