GBP decreased steadily versus the USD

Good morning from Hamburg and welcome to our first Daily FX Report for this week. An aircraft with 54 people on board crashed in Indonesia's remote and mountainous region of Papua on Sunday, a government official said, the latest in a string of aviation disasters in the Southeast Asian nation. "The latest information is that the Trigana aircraft that lost contact has been found at Camp 3, Ok Bape district in the Bintang Mountains regency," Air Transportation Director General Suprasetyo told reporters. "Residents provided information that the aircraft crashed into Tangok mountain." There was no immediate word on whether anyone survived.

Anyway, we wish you a successful trading week!

Market Review – Fundamental Perspective

Investors will comb through Wednesday's minutes of the most recent Federal Reserve meeting for indications on how the U.S. central bank will react to the recent yuan devaluation and the further decline in oil prices. The recent outperformance of bank stocks and underperformance of utilities, both on expectations of higher Treasury yields, support current market bets that the Fed will raise rates for the first time in nearly a decade after its mid-September meeting. The performance gap between the two sectors widened in favor of financials to its largest since May 2008 shortly after the Fed's July meeting. But this week, following the nearly 3 percent devaluation in China's currency and a steepening decline in oil prices, it narrowed to its tightest in more than a month. Even if the yuan seems to have stabilized, its 3-percent drop against the U.S. dollar and the possibility of a further slide will continue to be something to watch for highly exposed companies.
Waiting too long to raise interest rates could damage Britain's economic recovery and will need to be done "well before" inflation reaches the Bank of England's 2 percent target, Bank of England policymaker Kristin Forbes said on Sunday. Writing in the Telegraph, Forbes said increasing rates too soon might make companies less willing to invest and consumers less willing to spend, but the time lag before a change in monetary policy is felt meant there was a risk of leaving it too late. She also said China's yuan devaluation and falling energy and commodity prices meant there was a "bit more time" before inflationary pressures build in Britain, but she would be looking closely for signs of stronger domestic price pressures.

Daily Technical Analysis

GBP/USD (Daily)

As the chart shows, the GBP decreased steadily versus the USD since the mid of July 2014. At the support around 1.4726 the bearish trend was broken and the price rose till the level around 1.5770. It has fallen after it reached that resistance level. The CCI is showing that the pair is likely to move upward.

Support & Resistance (Daily)