25 Nov 2013
GBP/USD consolidates sub-1.6200
FXstreet.com (Edinburgh) - The sterling continues to drift lower against the greenback on Monday, pushing the GBP/USD to the lower band of the intraday range at 1.6185/80 so far.
GBP/USD lower on profit-taking
The generalized tone favouring the greenback is hurting the risk-associated assets at the beginning of the week, as market participants continue to cash up recent strong gains. Collaborating with the GBP weakness, Mortgage Approvals gauged by BBA dropped to 42.8K in October, coming in short of estimates at 45.2K and down from September’s 43.2K. In light of the ongoing debate regarding the BoE’s forward guidance, analysts at BAML observed, “With UK economic data and sentiment indices continuing to improve dramatically since guidance was introduced, this strategy has been a challenging one. But we tend to share Deputy Governor Charlie Bean’s recent assertion that considering how little tightening is priced in compared to the historical correlation between 2y swap rates relative to the overnight rate, and the level of UK PMIs, guidance has had a stronger impact than some give it credit for”.
GBP/USD critical levels
As of writing the pair is down 0.17% at 1.6189 and a break below 1.6178 (low Nov.22) would open the door to 1.6110 (MA10d) and then 1.6100 (psychological level). On the flip side, the initial hurdle aligns at 1.6219 (high Nov.22) followed by 1.6241 (high Nov.25) and then 1.6258 (high Oct.23).
GBP/USD lower on profit-taking
The generalized tone favouring the greenback is hurting the risk-associated assets at the beginning of the week, as market participants continue to cash up recent strong gains. Collaborating with the GBP weakness, Mortgage Approvals gauged by BBA dropped to 42.8K in October, coming in short of estimates at 45.2K and down from September’s 43.2K. In light of the ongoing debate regarding the BoE’s forward guidance, analysts at BAML observed, “With UK economic data and sentiment indices continuing to improve dramatically since guidance was introduced, this strategy has been a challenging one. But we tend to share Deputy Governor Charlie Bean’s recent assertion that considering how little tightening is priced in compared to the historical correlation between 2y swap rates relative to the overnight rate, and the level of UK PMIs, guidance has had a stronger impact than some give it credit for”.
GBP/USD critical levels
As of writing the pair is down 0.17% at 1.6189 and a break below 1.6178 (low Nov.22) would open the door to 1.6110 (MA10d) and then 1.6100 (psychological level). On the flip side, the initial hurdle aligns at 1.6219 (high Nov.22) followed by 1.6241 (high Nov.25) and then 1.6258 (high Oct.23).