GBP/USD consolidates above 1.6070 despite encouraging labor US data
The cable was hovering around 1.6070 area, before the release of good US labor data that initially boosted the greenback, dragging the cross downwards to 1.6060 zone. However, in less than 5 minutes the pair pared all of its earlier tiny losses and gathered uptrend momentum to trade higher above the 1.6070 area. Is seems more than plausible that with just a few weeks ahead of FOMC October meeting, investors cannot be easily convinced that solid data would be sufficient enough to resurface “tapering” sooner than later. On the other hand, while Bernanke stated clearly that the “tapering” is nothing else, but data driven and data dependent, traders should be aware of any US news as they could have a crucial impact on the cable.
Technical Outlook on GBP/USD
Karen Jones, Head of Technical Analysis at Commerzbank suggests that “GBP/USD massive acceleration places the 2009-2013 downtrend at 1.6333 in the spotlight.” Furthermore, she mentions that “Despite the directional move seen yesterday we continue to look for this to hold the topside. Support is offered by 1.60 then the 1.5918 accelerated uptrend – while above here the market remains immediately bid. Only below here will allow for a slide back to the 1.5653 3 month uptrend.”