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17 Sep 2013
GBP/USD under 1.5900 as soft CPI baffles “tapering”
FXstreet.com (Athens)- The GBP/USD was hovering above 1.5900 area, but as soon as the monthly CPI released at weaker level the pair failed to sustain the 1.5900 level.
GBP/USD gets a slight hit on weaker CPI; will softer CPI have an impact on FOMC decision?
The GBP/USD was trading steadily above 1.5600, due to the fact that most of the traders have already priced in a dovish FOMC meeting , (i.e. a modest taper of 10-15billions in combination with some additional forward guidance rhetoric) but as soon as the softer data released the cable fell under the 1.5600 handle. At the time of writing, the cable gathered again uptrend momentum and reversed at its earlier key zone. The GBP/USD is now trading at the exact area level in which was before the announcement. While investors might caught a bit off-guard and muted on softer data, it seems that the vast majority of investors consider that the 2-day FOMC will come out with a dovish well expected policy, already priced in the pair. But the traders should bear into deep consideration that if softer CPI lead FOMC not to fully deliver on these expectations what will the outcome be..
Technical Outlook and Strategic Bias on GBP/USD
According to Karen Jones, Head Technical Analyst of Commerzbank, “while we note that the market continues to accelerate higher and indeed this has been for more aggressive than we anticipated, it is still regarded as a correction only. We note the 13 count on the TD combo and TD perfected set up on the weekly chart and this suggests a warning for further moves higher at present, currently we would recommend now exiting long positions.”
GBP/USD gets a slight hit on weaker CPI; will softer CPI have an impact on FOMC decision?
The GBP/USD was trading steadily above 1.5600, due to the fact that most of the traders have already priced in a dovish FOMC meeting , (i.e. a modest taper of 10-15billions in combination with some additional forward guidance rhetoric) but as soon as the softer data released the cable fell under the 1.5600 handle. At the time of writing, the cable gathered again uptrend momentum and reversed at its earlier key zone. The GBP/USD is now trading at the exact area level in which was before the announcement. While investors might caught a bit off-guard and muted on softer data, it seems that the vast majority of investors consider that the 2-day FOMC will come out with a dovish well expected policy, already priced in the pair. But the traders should bear into deep consideration that if softer CPI lead FOMC not to fully deliver on these expectations what will the outcome be..
Technical Outlook and Strategic Bias on GBP/USD
According to Karen Jones, Head Technical Analyst of Commerzbank, “while we note that the market continues to accelerate higher and indeed this has been for more aggressive than we anticipated, it is still regarded as a correction only. We note the 13 count on the TD combo and TD perfected set up on the weekly chart and this suggests a warning for further moves higher at present, currently we would recommend now exiting long positions.”