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Struggling to Hold Above $1.3600 But Buoyancy Noted

GBP
MNI (London)
  • Corrective pullback away from the Jan14 high of $1.3710 extended in European trade Monday to a low of $1.3520, holding shy of challenging the 76.4% retrace level at $1.3513($1.3452-1.3710).
  • Move lower was driven by risk aversion, along with UST yields, with EUR/GBP move back above Gbp0.8900 also added weight.
  • USD pared gains through a US holiday thinned afternoon session, allowed GBP/USD to edge high before finding resistance around $1.3588.
  • Rate touched a low of $1.3576 in opening Asia before renewed risk appetite edged rate to $1.3615 with pullback through to the European open finding support around $1.3600.
  • EUR/GBP edged back within its key 1.0% 10-dma envelope Monday, having probed outside Thursday/Friday. Cross traded to Gbp0.8925 but has struggled to hold those recovery gains, currently trading around Gbp0.8893. Envelope base currently comes through at Gbp0.8859.
  • Halifax House Prices data at 0930GMT provides domestic data interest Tuesday. BOE Haldane(hawk) in conversation with Lord Rusbridger at 1800GMT.
  • Germany ZEW and Janet Yellen Treasury Secretary confirmation hearing in the Senate main market focus.
  • Support $1.3576, $1.3550, $1.3520/13/05. Resistance $1.3615/20, $1.3637-65(61.8%-76.4% $1.3710-1.3520)
  • MNI Techs: GBPUSD dipped lower Monday, slipping through the Friday lows to expose 1.3505. A breach of this level would signal scope for a deeper short-term sell-off and expose the key near-term support at 1.3452, Jan 11 low. From a trend perspective, the outlook remains bullish. A clear breach of 1.3710/12 would confirm a resumption of the current uptrend and open 1.3773, the May 1, 2018 high.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets

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