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GBP/USD Gains Accelerate on Break of Layered Resistance

GBP
  • As mentioned above, USD sell-off triggered by no specific catalyst or headline driver, but has helped GBP/USD accelerate gains on the way through crowded resistance at the Aug25/Aug29 highs of 1.2654/55. Today's high within striking distance of 1.2675, the 50% retracement for the Aug22-25 downleg. Despite the pick up in activity across spot, futures volumes sit just below average for this time of day, with cumulative activity around 15% below average across the U3 contract.
  • GBP strength puts EUR/GBP in negative territory for the first session in six, with the 50-dma first downside level of note at 0.8586. Support seen stronger into 0.8566, the Tuesday low and the 38.2% retracement for the late August upleg.
  • Rally so far opens a gap with the most sizeable strike rolling off at the NY cut at the $1.2600 handle (£526mln set to roll off), with market shrugging off renewed signs of softness in the housing market (mortgage approvals fell short of expectations and a Zoopla report released today shows residential transactions set to fall over 20% this year).
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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