GBP gains offer retracement back toward recent multi-year high – Scotiabank

FXStreet Insights Team FXStreet

Pound Sterling (GBP) is also showing impressive strength with a 0.6% gain vs. the US Dollar (USD) and mid-performance among the G10, retracing a good portion of its latest pullback from last Monday’s multi-year high, Scotiabank's Chief FX Strategist Shaun Osborne notes.

Eyeing BoE speeches for continued rate support

"Second- and third-tier releases have included stronger than expected housing price data, softer money supply growth, and mixed lending data. The final manufacturing PMI surprised to the upside, at 46.4, however the level remains well short of the UK’s European peers whose readings are much closer to the expansion/contraction threshold at 50."

"This week’s BoE calendar is heavy and we’ll be watching to see if the speakers maintain the latest neutral/ hawkish shift in tone. The recent fade in easing expectations has offered the pound some fundamental (rate) support with markets now pricing in only 37bpts of additional easing by December, a 20bpt reduction from early May."

"The medium-term trend is bullish and GBP remains well supported as it recovers its latest pullback from last Monday’s multiyear high. The RSI is at 62, leaving ample room for further gains ahead of the overbought threshold at 70. Near-term resistance has been observed in the mid1.35s and we see no additional resistance ahead of the latest high just below 1.36. Near-term support is expected below 1.3450."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD tests nine-day EMA support near 1.1850

EUR/USD remains in the negative territory for the fourth successive session, trading around 1.1870 during the Asian hours on Friday. The 14-day Relative Strength Index momentum indicator at 56 stays above the midline, confirming steady momentum. RSI has eased but remains above 50, indicating momentum remains constructive for the bulls.

GBP/USD consolidates around 1.3600 vs. USD; looks to US CPI for fresh impetus

The GBP/USD pair remains on the defensive through the Asian session on Friday, though it lacks bearish conviction and holds above the 1.3600 mark as traders await the release of the US consumer inflation figures before placing directional bets.

Gold recovers swiftly from weekly low, climbs back closer to $5,000 ahead of US CPI

Gold regains positive traction during the Asian session on Friday and recovers a part of the previous day's heavy losses to the $4,878-4,877 region, or the weekly low. The commodity has now moved back closer to the $5,000 psychological mark as traders keenly await the release of the US consumer inflation figures for more cues about the Federal Reserve's policy path.