Sterling extends recovery ahead of Fed

Slobodan Drvenica Windsor Brokers

Cable accelerated higher in US trading on Wednesday, boosted by profit taking from last week’s fall and solid UK inflation data.

The move can be also seen as positioning ahead of key event today, Fed rate decision, as wide expectations for keeping rates unchanged, may further inflate pound.

Rising bullish momentum supports the advance, along with daily stochastic that reversed from oversold territory and heads north.

Bulls test resistance at 1.2634 (daily Tenkan-sen / 50% retracement of 1.2762/1.2505), break of which will expose pivotal barriers at 1.2650/65 zone (converged 10/20SMA’s / Fibo 61.8%).

Surprise action from Fed in unexpected rate cut would offer stronger support to sterling and prompt extension towards key barriers at 1.2758/62 (12/7 June highs).

Otherwise, fresh easing can be expected if Fed decision comes in line with expectations, however, comments from Fed chief Jerome Powell will be closely watched for fresh signals about central bank’s next steps.

Res: 1.2650; 1.2665; 1.2702; 1.2714
Sup: 1.2608; 1.2569; 1.2542; 1.2505

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

EUR/USD stays defensive below 1.1900 as USD recovers

EUR/USD trades in negative territory for the third consecutive day, below 1.1900 in the European session on Thursday. A modest rebound in the US Dollar is weighing on the pair, despite an upbeat market mood. Traders keep an eye on the US weekly Initial Jobless Claims data for further trading impetus.

GBP/USD holds above 1.3600 after UK data dump

\GBP/USD moves little while holding above 1.3600 in the European session on Thursday, following the release of the UK Q4 preliminary GDP, which showed a 0.1% growth against a 0.2% increase expected. The UK industrial sector activity deteriorated in Decembert, keeping the downward pressure intact on the Pound Sterling.

Gold sticks to modest intraday losses as reduced March Fed rate cut bets underpin USD

Gold languishes near the lower end of its daily range heading into the European session on Thursday. The precious metal, however, lacks follow-through selling amid mixed cues and currently trades above the $5,050 level, well within striking distance of a nearly two-week low touched the previous day.

Cardano eyes short-term rebound as derivatives sentiment improves

Cardano (ADA) is trading at $0.257 at the time of writing on Thursday, after slipping more than 4% so far this week. Derivatives sentiment improves as ADA’s funding rates turn positive alongside rising long bets among traders.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Sonic Labs’ vertical integration fuels recovery in S token

Sonic, previously Fantom (FTM), is extending its recovery trade at $0.048 at the time of writing, after rebounding by over 12% the previous day. The recovery thesis’ strengths lie in the optimism surrounding Sonic Labs’ Wednesday announcement to shift to a vertically integrated model, aimed at boosting S token utility.