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Forex: GBP/USD in red hovering over 1.5550

The sterling keeps the bearishness intact on Wednesday, dragged more than one big figure against the greenback after the dovish tone out of the Quarterly Inflation Report of the BoE and Governor King’s speech.

Christopher Vecchio, Currency Analyst at DailyFX, commented the negative implication for the sterling, saying, “First, it means that more quantitative easing could be on the way. Over the past several years, the combination of low interest rates and increased asset purchases has translated into lower yields on Gilts… Second, it means that inflation is likely to run higher, further siphoning purchasing power from the British consumer…”

As of writing, the cross is down 0.71% at 1.5656 and a breakdown of 1.5505 (low Aug.6) would allow 1.5490 (low Aug.2) and finally 1.5458 (low Jul.26).
On the flip side, resistance levels line up at 1.5690 (high Feb.13) ahead of the psychological level at 1.5700 and then 1.5712 (MA10d).

Euro fails to sustain gains

The euro briefly climbed above 1.3500 on Wednesday extending its recovery from 1.3352 where it bottomed on Friday. However, EUR/USD was lacking in conviction and came under pressure after Portugal's PM said unemployment figures are worrying.
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