GBPUSD New Low Below 1.5460 - Not Aligned with the BOE
Aayush Jindal
Key Highlights
British Pound dived Intraday against the US Dollar, as the rate hike expectation of the market was not aligned with the BOE members.
BOE meeting minutes revealed that only one member was in favor of a rate hike compared with the forecast of two.
UK GDP Estimate released by the National Institute of Economic and Social Research came in at 07%, unchanged from the last reading.
GBPUSD Technical AnalysisThe GBPUSD pair moved lower sharply recently after the release of the BOE meeting minutes, and traded below 1.5500 support area. It traded as low as 1.5466 where buyers appeared to defend more losses. There an expanding triangle pattern formed on the hourly chart, which helped in preventing more downsides.Currently, there is a small breakout pattern formed with a resistance around the 38.2% Fib retracement level of the last drop from the 1.5635 high to 1.5466 low. The most critical point to note is the fact that there is a bearish cross noted for the 100 and 200 simple moving averages, and the pair is well below it. So, the chances of the pair trading lower have increased over time, and sellers might remain in control for some time.On the upside, an immediate resistance is around the triangle trend line, followed by the 50% Fib level. Any further gains might push the pair towards the 100 and 200 SMA confluence area.On the downside, the last swing low of 1.5466 could be seen as a support area. A break below it could take GBPUSD towards 1.5420.NIESR GDP EstimateRecently, the UK saw a major release, as the GDP Estimate, which is an estimate of growth over the last 3 months up to the report which comes out a month before the official announcement was released by the National Institute of Economic and Social Research. There was no change in the estimate, as the UK GDP is expected to come in at 0.7%.The report stated that “Compared to the same three month period in 2014, this implies a year-on-year growth rate of 2.7 per cent. This is consistent with our recently released quarterly forecast in which we expect an average rate of growth of 2.5 per cent for 2015 as a whole”.
Currently, there is a small breakout pattern formed with a resistance around the 38.2% Fib retracement level of the last drop from the 1.5635 high to 1.5466 low. The most critical point to note is the fact that there is a bearish cross noted for the 100 and 200 simple moving averages, and the pair is well below it. So, the chances of the pair trading lower have increased over time, and sellers might remain in control for some time.On the upside, an immediate resistance is around the triangle trend line, followed by the 50% Fib level. Any further gains might push the pair towards the 100 and 200 SMA confluence area.On the downside, the last swing low of 1.5466 could be seen as a support area. A break below it could take GBPUSD towards 1.5420.NIESR GDP EstimateRecently, the UK saw a major release, as the GDP Estimate, which is an estimate of growth over the last 3 months up to the report which comes out a month before the official announcement was released by the National Institute of Economic and Social Research. There was no change in the estimate, as the UK GDP is expected to come in at 0.7%.The report stated that “Compared to the same three month period in 2014, this implies a year-on-year growth rate of 2.7 per cent. This is consistent with our recently released quarterly forecast in which we expect an average rate of growth of 2.5 per cent for 2015 as a whole”.
Currently, there is a small breakout pattern formed with a resistance around the 38.2% Fib retracement level of the last drop from the 1.5635 high to 1.5466 low. The most critical point to note is the fact that there is a bearish cross noted for the 100 and 200 simple moving averages, and the pair is well below it. So, the chances of the pair trading lower have increased over time, and sellers might remain in control for some time.On the upside, an immediate resistance is around the triangle trend line, followed by the 50% Fib level. Any further gains might push the pair towards the 100 and 200 SMA confluence area.On the downside, the last swing low of 1.5466 could be seen as a support area. A break below it could take GBPUSD towards 1.5420.NIESR GDP EstimateRecently, the UK saw a major release, as the GDP Estimate, which is an estimate of growth over the last 3 months up to the report which comes out a month before the official announcement was released by the National Institute of Economic and Social Research. There was no change in the estimate, as the UK GDP is expected to come in at 0.7%.The report stated that “Compared to the same three month period in 2014, this implies a year-on-year growth rate of 2.7 per cent. This is consistent with our recently released quarterly forecast in which we expect an average rate of growth of 2.5 per cent for 2015 as a whole”.