30 Oct 2013
GBP/USD holds its bearings after ADP said ‘goodbye’ to tapering
FXstreet.com (Athens) – The GBP/USD was little changed after the US ADP Private Payrolls data was released much worse than expected – apart from an initial spike as of 10 pips – as markets have already well priced in a dovish FOMC outcome.
The GBP/USD spiked initially to 1.6076 – a ten pip increase – as it was hovering around 1.6066 area, before the dismal ADP data released. The ADP report showed that the US private sector created 130K jobs during the month of October, missing the median at 150K and lower than September’s print at 145K (revised from 166K). However, it seems that markets have been primed for dovish FOMC, therefore the bad release was in favor of the market approach, in the aspects that it is well received as a final goodbye to any prospect of potential tapering.
Technical Perspective on GBP/USD
Karen Jones Head Technical Analyst of Commerzbank, mentions that the “GBP/USD GBP/USD has started to erode the 1.6045 3 month uptrend, this is exposed. Rallies are expected to find the 1.6259 early October high and the 1.6302/69 2012 highs and 2009-13 resistance line tough overhead resistance. We are alert to failure at this critical zone and note the 13 count on the daily chart from the TD combo indicator (TD resistance lies at 1.6335) and the large divergence of the daily RSI.Failure at the uptrend will trigger losses to the recent low and initial Fibo support at 1.5896/1.5915. Failure there will target the 38.2% Fibonacci retracement of the July-to-October advance at 1.5705 and possibly 1.5535, the 50% retracement.”
The GBP/USD spiked initially to 1.6076 – a ten pip increase – as it was hovering around 1.6066 area, before the dismal ADP data released. The ADP report showed that the US private sector created 130K jobs during the month of October, missing the median at 150K and lower than September’s print at 145K (revised from 166K). However, it seems that markets have been primed for dovish FOMC, therefore the bad release was in favor of the market approach, in the aspects that it is well received as a final goodbye to any prospect of potential tapering.
Technical Perspective on GBP/USD
Karen Jones Head Technical Analyst of Commerzbank, mentions that the “GBP/USD GBP/USD has started to erode the 1.6045 3 month uptrend, this is exposed. Rallies are expected to find the 1.6259 early October high and the 1.6302/69 2012 highs and 2009-13 resistance line tough overhead resistance. We are alert to failure at this critical zone and note the 13 count on the daily chart from the TD combo indicator (TD resistance lies at 1.6335) and the large divergence of the daily RSI.Failure at the uptrend will trigger losses to the recent low and initial Fibo support at 1.5896/1.5915. Failure there will target the 38.2% Fibonacci retracement of the July-to-October advance at 1.5705 and possibly 1.5535, the 50% retracement.”