Image © Adobe Images
The GBP / USD exchange rate has risen above 1.28 in the past 24 hours. Hantec Markets' analyst and technical forecaster Richard Perry is exploring the next levels that could come into play.
With dollar strength less certain for the past couple of sessions and with Brexit positivity rising to the upside, we saw a GBP / USD rally yesterday.
Although there was a +80 pip rebound that day, it also included a questionable bull failure that pulled the market -100 pips up from the day to close.
It appears that volatility is building up which needs to be taken into account when positioning.
The technical data shows that yesterday's move may have turned a corner, but a close above 1.2860 is required to confirm an improvement.
This would then open 1.3000.
The momentum indicators have improved, but seem to be at a crossroads again, where the RSI and stochastics are back at levels where the last rally failed in mid-September.
This outlook mainly plays a role in our medium-term medium / uncertain position between 1.2650 / 1.3000.
The hourly chart is reflecting the short term stimulus which must now be above 1.2825 to hold.
A risky start to the week just lost some of its steam this morning.
Markets reacted to some good news for a change as moves toward a $ 2.2 trillion package of US tax support drew closer and evidence of positive moves emerged from the Brexit trade negotiations.
This leaves the markets at an intriguing tipping point.
The dollar has rallied in recent weeks as risk appetite stalled amid mounting second wave COVID fears.
This is still a key factor for traders to set a price for. However, if Congress can get a new fiscal aid package through the line, it would be a very welcome boost in the days ahead.
Markets are looking more cautious after a few sessions this morning responding to the first news.
We saw earlier that hopes for an agreement in Congress are quickly disappearing. It seems that the markets in Congress (but also in the Brexit trade negotiations between the EU and the UK) need further stimulus to deliver an opinion.
The dollar has deviated, but only marginally, and its multi-week recovery has so far done little lasting damage. Stocks have rebounded but the move has stalled slightly today.
Gold has rallied after a period of selling pressure, but has also stalled. The only crucial motor today seems to be the pound sterling, but here too, politics can change quickly so the pound sterling is a volatile game at the moment.
The economic calendar is a little busier today as we near the end of the month. German inflation is due at 1300 BST and is expected to decrease by -0.1% in September (after a decrease of -0.2% in August) and by -0.1% year over year (-0.1% in August ) fall. .
The U.S. trade balance is at 1330 BST and is expected to show a slight increase in the deficit to $ 81.8 billion in August (from $ 80.1 billion in July). The S&P Case Shiller house price index is at 1400 BST and is expected to improve to + 3.8% in July (from + 3.5% in June).
The key data point of the day is Conference Board consumer confidence around 1500 BST, which is projected to improve to 89.5 in September (up from 84.8 in August).
There are plenty of Fed spokesmen to look out for today, with four on the agenda. John Williams (voter, centrist) of FOMC speaks twice at 1415BST and 1800BST, while Patrick Harker (voter, slightly Hawkish) of FOMC speaks at 1430BST.
Fed vice chairman Richard Clarida (voter can be a bit reluctant) speaks at 4:40 p.m. CET, while FOMC's Randall Quarles speaks first at 6:00 p.m. CET and then again at 2:00 p.m. CET. With a range of comments, this could show increased volatility for the dollar today.
(tagsToTranslate) British Pound Sterling (t) GBP (t) Pound Sterling (t) British Pound (t) Pound Sterling (t) Live (t) Pound Sterling Live (t) British Pound Live (t) Pound Live (t) News (t) Latest news