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GBP/USD extends bullish momentum, supply 1.5250 tested

FXStreet (Bali) - GBP/USD continues to run higher in early Tokyo, with offers at the critical juncture of 1.5240 being absorbed, as the pair enters what should be considered as a 'battle royal' zone between buyers and sellers, with sizeable stop bu orders north of 1.5260/70.

GBP/USD launches attack towards sellers' stronghold

It will be interesting to monitor the price action during the next few hours in Asia, to gauge whether the market, despite the iliquid time of the day in this particular asset class, holds at these hefty highs - considering prospects for a Dec rate hike and options pricing - or is quickly rejected.

UK retail sales expected to turn negative

Later in the UK, retail sales will be released, and with expectations for a -0.4% decline in October, market participants looking to position for a downbeat report may find current prices exceptionally attractive. That said, the broad-based USD weakness post the FOMC minutes should be a warning sign, with EUR/USD finding it hard to make new lows.

GBP/USD technicals

According to Valeria Bednarik, Chief Analyst at FXStreet: "The technical stance is neutral in the short term, although a tepid positive tone is surging in the 1 hour chart, as the price has held above a horizontal 20 SMA while the technical indicators head higher well above their mid-lines. In the 4 hours chart, the 20 SMA continues lacking directional strength around the 38.2% retracement of the latest weekly decline around 1.5210, while the technical indicators are slowly turning higher above their mid-lines, lacking enough momentum to confirm further gains."

Australia RBA Foreign Exchange Transaction dipped from previous 712M to 516M in October

Australia RBA Foreign Exchange Transaction dipped from previous 712M to 516M in October
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BOJ preview: What to expect in USD/JPY?

USD/JPY is seen posting moderate losses at Tokyo-open and hovers around 123.50 levels, as the greenback extends correction from seven-month peaks against its major competitors. The major, however, manages to trade well above post-FOMC minutes low reached at 123.38, as the divergent monetary policy outlook between both the Fed and BOJ continue to favour the upside in USD/JPY. Although the FOMC minutes offered no new surprises overnight, the document did reveal that the Fed remains on track to raise interest rate next month, while such a move is expected to be data-dependent.
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