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20 Apr 2015
GBP/USD: Vulnerable and testing back below 1.49 handle
FXStreet (Guatemala) - GBP/USD is currently trading at 1.4894 with a high of 1.4985 and a low of 1.4886.
While we await UK events this week with the BoE Minutes on Wednesday, and Retail Sales on Thursday, GBP/USD is on the way back down and is currently testing out where it made a double bottom and ahead of 15th April resistance at 1.4870, a zone that may prove to be next support on a continuation below the 1.49 handle here. The greenback is in charge at the start of the week and the bears are stacking up with the UK elections forthcoming in May, leaving the pound to be vulnerable to the downside.
Analysts at RBS noted that for the first time this year the betting markets are attaching a higher probability to some form of Labour-led government than a Tory one. "The headline polling data remain very close (a tiny Labour lead), but the combination of the bias in the constituency boundaries (which persists even once adjustments are made for Labour’s poor polling in Scotland) and more apparent possibilities for a coalition or informal alliance on the centre-left mean the betting markets expect Ed Miliband to be in No.10 Downing St. on 8 May."
Technically, the score on the 1.50 handle was short lived and the major trades with a bearish bias on the both the short term and longer term charts. Karen Jones, chief analyst at Commerzbank explained that their longer term target remains the 1.4291/29 area. "This is where the 78.6% Fibonacci retracement of the 2009 uptrend meets the 2010 low. Note that this is also a support line extending back to 1985."
While we await UK events this week with the BoE Minutes on Wednesday, and Retail Sales on Thursday, GBP/USD is on the way back down and is currently testing out where it made a double bottom and ahead of 15th April resistance at 1.4870, a zone that may prove to be next support on a continuation below the 1.49 handle here. The greenback is in charge at the start of the week and the bears are stacking up with the UK elections forthcoming in May, leaving the pound to be vulnerable to the downside.
Analysts at RBS noted that for the first time this year the betting markets are attaching a higher probability to some form of Labour-led government than a Tory one. "The headline polling data remain very close (a tiny Labour lead), but the combination of the bias in the constituency boundaries (which persists even once adjustments are made for Labour’s poor polling in Scotland) and more apparent possibilities for a coalition or informal alliance on the centre-left mean the betting markets expect Ed Miliband to be in No.10 Downing St. on 8 May."
Technically, the score on the 1.50 handle was short lived and the major trades with a bearish bias on the both the short term and longer term charts. Karen Jones, chief analyst at Commerzbank explained that their longer term target remains the 1.4291/29 area. "This is where the 78.6% Fibonacci retracement of the 2009 uptrend meets the 2010 low. Note that this is also a support line extending back to 1985."