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Forex: GBP/USD capped at 1.5257 after US existing home sales

FXstreet.com (Barcelona) - The GBP/USD printed new highs today despite the narrow range as the market was trading the release of both US housing and EMU confidence. The first disappointed the market and the latter surprised on the upside. The pair was capped at 1.5257 high and profit taking has brought the price to 1.5240/45, as of writing, still above Friday’s close of 1.5230.

The preliminary release of consumer confidence in April rose from -23.50 to -23.30 instead of falling further to -23.85. Data is at its lowest level since July 2012, -21.5. Instead of improving to 5.01M in March, US existing home sales fell from 4.95M to 4.92M, disappointing analysts. February data was revised lower from 4.98M to 4.95. US Chicago Fed National Activity Index fell from 0.76 to -0.23 in March. The February figure was revised higher from 0.44. Consumer confidence in the EMU is expected to drop from -23.50 to -23.85 in April.

Despite the daily rise, the British Pound is dealing with the UK credit rating downgrade by Fitch agency from AAA to AA+/stable Friday night. “As we’ve been through this before we don’t expect unusual price action in gilts today, although GBP is probably more vulnerable to some near-term weakness. The UK government leaked on Sunday that an augmentation to Funding for Lending will be announced over the next two weeks”, wrote TD Securities analyst Annette Beacher.

“Last week's reversal at 1.5367 confirms, that the downtrend from 1.5410 high is still intact and current intraday outlook is negative below 1.5270 resistance, towards 1.5155 support zone”, wrote Deltastock.com analyst Stoyan Mihaylov.

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