28 Apr 2015
GBP/USD eyeing 1.51 levels – FXStreet
FXStreet (Barcelona) - Omkar Godbole, FXStreet Editor and Analyst, views that GBP/USD might see selling pressure near 1.53-1.5344 and dive down to test 1.51 levels.
Key Quotes
“Ahead of the Wednesday’s FOMC statement, the pair could run into fresh offers around 1.53-1.5344. The weakness in the USD since the last week indicates the markets could have priced-in a slightly dovish Fed statement. Hence, the markets are likely to shift focus to the UK election uncertainty going into the weekend.”
“The possibility of a hung parliament is for real as indicated by the election polls. Four polls published on Monday showed just how close and unpredictable the election outcome is. Moreover, the polls showed neither the Tories nor Labour can sustain a consistent lead in the polls.”
“Given the markets have priced-in the possible dovish FOMC statement, the focus is likely to shift back on the election uncertainty and a weaker-than-expected UK first quarter GDP data released today. A weak GDP print is likely to delay the rate hike expectations in the UK as well.”
“Meanwhile, election uncertainty could see the pair mimic the moves seen back in 2010 in run up to elections, when it had dropped 300 pips. A similar move could see the pair drop to 1.50 levels ahead of the weekend.”
“However, the losses are likely to be capped around the falling trend line support on the weekly chart located at 1.51. On the hourly charts, the RSI has clearly formed lower highs despite the pair posting higher highs since Apr. 22. Meanwhile, the RSI also hit overbought zone on the 4-hour time frame. Consequently, there is a high possibility of a technical correction too.”
“A drop below 1.5228 (76.4% Fib expansion of 1.4564-1.5051-1.4854) could see a sharp sell-off towards 1.51 levels. On the other hand, immediate gains appear capped 1.53and 1.5344 (100% Fib expansion).”
Key Quotes
“Ahead of the Wednesday’s FOMC statement, the pair could run into fresh offers around 1.53-1.5344. The weakness in the USD since the last week indicates the markets could have priced-in a slightly dovish Fed statement. Hence, the markets are likely to shift focus to the UK election uncertainty going into the weekend.”
“The possibility of a hung parliament is for real as indicated by the election polls. Four polls published on Monday showed just how close and unpredictable the election outcome is. Moreover, the polls showed neither the Tories nor Labour can sustain a consistent lead in the polls.”
“Given the markets have priced-in the possible dovish FOMC statement, the focus is likely to shift back on the election uncertainty and a weaker-than-expected UK first quarter GDP data released today. A weak GDP print is likely to delay the rate hike expectations in the UK as well.”
“Meanwhile, election uncertainty could see the pair mimic the moves seen back in 2010 in run up to elections, when it had dropped 300 pips. A similar move could see the pair drop to 1.50 levels ahead of the weekend.”
“However, the losses are likely to be capped around the falling trend line support on the weekly chart located at 1.51. On the hourly charts, the RSI has clearly formed lower highs despite the pair posting higher highs since Apr. 22. Meanwhile, the RSI also hit overbought zone on the 4-hour time frame. Consequently, there is a high possibility of a technical correction too.”
“A drop below 1.5228 (76.4% Fib expansion of 1.4564-1.5051-1.4854) could see a sharp sell-off towards 1.51 levels. On the other hand, immediate gains appear capped 1.53and 1.5344 (100% Fib expansion).”