The absence of any economic data, whether bearish or bullish, for the GBPUSD pair has left the major susceptible to further downside on the session. Now lower by 0.31% on the session, and coming up on support via the 1.5700, the pair may be seeing the end of its down days.
Signals Turn Bullish
The notion of a bullish turn in the market is being purported by the spot currency trading lower into a 4-year trend line. The ascending trendline – marked by 1.3926-1.5286 – serves as the major trendline support in the near term, coinciding with an oversold signal in technical oscillators. Incidentally, the current support figure is coinciding with a 61.8% fib support figure at 1.5690.
As a result, any upside potential in the GBPUSD, off of the support figure, would likely target the 1.5920 initial resistance figure.
Downside potential for the major pair remains in a break of the trendline, which would be considered widely bearish for the near term sterling outlook. The break would prompt an immediate test of 1.5443 support.
Fundamental Consideration
Even with the market remaining unconvinced of any interest rate reduction by the BOE in the near term, it seems that pessimistic economic fundamentals have helped in keeping any bullish GBPUSD momentum at bay in the short term. Specifically, with the UK GDP report showing less than exemplary growth in the economy last week.
However, with the global economy expected to stabilize and rebound this year, the market sentiment could change – making it likely that UK policymakers will refrain from doing anything to jeopardize the more bullish notion. This more than solidifies the notion that the BOE will remain in a wait and see approach as fundamentals hopefully improve over the next six months.
Expect any movement in the underlying spot to reflect this notion ahead of the Federal Reserve meeting on Wednesday (January 30th), as well as the RBNZ meeting shortly after.
Source: FXStreet.com
Signals Turn Bullish
The notion of a bullish turn in the market is being purported by the spot currency trading lower into a 4-year trend line. The ascending trendline – marked by 1.3926-1.5286 – serves as the major trendline support in the near term, coinciding with an oversold signal in technical oscillators. Incidentally, the current support figure is coinciding with a 61.8% fib support figure at 1.5690.
As a result, any upside potential in the GBPUSD, off of the support figure, would likely target the 1.5920 initial resistance figure.
Downside potential for the major pair remains in a break of the trendline, which would be considered widely bearish for the near term sterling outlook. The break would prompt an immediate test of 1.5443 support.
Fundamental Consideration
Even with the market remaining unconvinced of any interest rate reduction by the BOE in the near term, it seems that pessimistic economic fundamentals have helped in keeping any bullish GBPUSD momentum at bay in the short term. Specifically, with the UK GDP report showing less than exemplary growth in the economy last week.
However, with the global economy expected to stabilize and rebound this year, the market sentiment could change – making it likely that UK policymakers will refrain from doing anything to jeopardize the more bullish notion. This more than solidifies the notion that the BOE will remain in a wait and see approach as fundamentals hopefully improve over the next six months.
Expect any movement in the underlying spot to reflect this notion ahead of the Federal Reserve meeting on Wednesday (January 30th), as well as the RBNZ meeting shortly after.
Source: FXStreet.com
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