Friday Market Update – GBP/USD
British Pound continues to attract buyers across the currency board following Bank of England’s remarks that the recent global turmoil have not changed the bank’s view on monetary policies.
GBP/USD rate was pushed higher during yesterday’s trade in the UK and US sessions and hit 10 day high at around 1.5470 thus advancing some 300 pips since the 1.5160 low printed last Friday.
Currently, the GBP/USD exchange rate is retracing and is likely to test support around 1.5400, which not so long ago acted as a resistance and this area is a 38.2% retracement from this year’s low to this year’s high hence is likely to attract higher volatility and sharp moves. Current technical setup suggests buying dips on GBP pairs with GBP/USD aiming to return above 1.56 to continue within the bullish channel. Long positions should be reconsidered should the market take GBP/USD below 1.5350 (orange rectangle) as then the next target for sellers will be 1.5250.
The GBP/USD data for the last 15 years shows almost 800 average pip difference between the high and low for each September and so far this year shows a 300 pip difference therefore expect to see sharp movements.
Inflation, inflation, inflation reports followed by hugely anticipated Fed’s Interest Rate Decision.
Major macroeconomic data releases next will have a great impact on currency trends for the next weeks of trade and party should begin on Tuesday with UK releasing CPI followed by US Retail sales later that day. On Wednesday we have Eurozone’s and US CPI followed by Fed’s Interest Rate Decision and Economic Projections on Thursday, September 17 therefore expect to see a few hundred pip movements on majors and crosses.
With that in mind, we strongly advise to reconsider your exposure for the next week of trade and use stop loss orders on each trade to avoid disappointments.