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$1.4200/10 the Hurdle Ahead of YTD $1.4248 High (Jun01)

GBP
MNI (London)
  • Friday's release of US Jobs Report provided no added clues to the Fed's timetable for tapering, NFP showing an improvement but missed expected level.
  • Market had positioned for a stronger release and consequently had pared short USD positions into the release which pressed GBP/USD down to $1.4083.
  • Release miss prompted a sharp move back into those short USD positions and pushed rate up to $1.4200 before momentum faltered.
  • Rate eased to $1.4155, closing the week at $1.4158.
  • NFP positioning had allowed EUR/GBP to ease to Gbp0.8565 with the snap back in EUR/USD reaction outpacing GBP/USD which bounced the cross to Gbp0.8592. Asia extended this recovery to Gbp0.8605 but remains below its key 10-dma (currently Gbp0.8609) which keeps GBP underlying tone buoyant.
  • This GBP weakness in Asia saw GBP/USD drift off to $1.4139, but was holding above $1.4140 into Europe.
  • Support $1.4140, ahead of $1.4128/11(61.8%-76.4% 1.4083-1.4200), $1.4100 and $1.4083. Break below here to expose $1.4063(76.4% $1.4006-1.4248).
  • Resistance $1.4200/10, break here to expose the YTD high of $1.4248(Jun01)
  • Light data calendar for the UK Monday. BOE Breeden speaking on Greening the Financial System at 1400GMT.
  • MNI Techs: GBPUSD remains below last week's 1.4248 high from Jun 1. Trend conditions remain bullish. The probe last week of former resistance at 1.4237, Feb 24 high reinforces a broader bullish theme however a clear break is required to confirm a resumption of the uptrend. This would open 1.4315 next, April 18, 2018 high. On the downside, initial firm support is at 1.4083, the Jun 4 low. A break would expose the 50-day EMA at 1.4012.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
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MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
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