Back
23 Dec 2014
GBP/USD technically oversold and resumes 1.55 handle
FXStreet (Guatemala) - GBP/USD has held onto the 1.55 handle in the latter part of the US shift despite penetrating to the new lows for the year at 1.5586 at the start of the session.
The catalyst for the dollar strength is two fold, a) with continued up beat outlooks for US growth prospects and b) an exit and safer haven under current conditions else where, such as in Europe, China and Russia.
However, cable is still in the downtrend that has persisted since July, while the UK has struggles of its own and following Governor Carney’s dovish tone at the November Inflation Report presentation, the UK money market pushed out the expectations for the first BoE rate hike to early 2016, as noted by analysts at Rabobank who now warn of further downside below 1.5500.
“That said, technical indicators are also looking oversold and a break above the 1.5700 region would lessen the risks that cable will be dragged lower by USD strength. Our central scenario suggests that cable will remain within a choppy range in the months ahead”.
The catalyst for the dollar strength is two fold, a) with continued up beat outlooks for US growth prospects and b) an exit and safer haven under current conditions else where, such as in Europe, China and Russia.
However, cable is still in the downtrend that has persisted since July, while the UK has struggles of its own and following Governor Carney’s dovish tone at the November Inflation Report presentation, the UK money market pushed out the expectations for the first BoE rate hike to early 2016, as noted by analysts at Rabobank who now warn of further downside below 1.5500.
“That said, technical indicators are also looking oversold and a break above the 1.5700 region would lessen the risks that cable will be dragged lower by USD strength. Our central scenario suggests that cable will remain within a choppy range in the months ahead”.