GBP/USD started to enjoy their honeymoon on 9.5, and the uptick trend is unstoppable and achieved the six weeks new high. On the GMT+3 basis, the pair closed at 1.31040 and opened high on 1.31049. The weakening USD is the root driver for the winning streak.
The unexpected weaker CPI cooled down the strengthening Dollar. The overheated U.S. market was slightly inhibited after the PPI fall. Given the strong performance in the labor market in August, the growth of the economy is not that optimistic. The cooling down will not reverse the rate hike on FED agenda on September. However, the tightening expectation on the medium-term could not remain unchanged to some extent due to the slow down. USD would then kept low-key for the short-term without considering moves in NAFTA (USMC from the latest news) or the trade war.
The second fundamental news brings to concern is from the UK. Eyes kept on the BOE’s Governor Carney speech. Head of Bank of England just extended his stay at the central bank to ensure well-going of Brexit process. BoE chief just clarified his attitude to the public for unaccepting the no-deal Brexit. The crash of the property market and falling house prices would slam England economy into its face. The inflation and unemployment would inevitably rise out of control.
Meanwhile, EU Brexit negotiator Michel Barnier expressed optimism about reaching a deal with Britain for the separation with EU within the next six to eight weeks. The Marathon for two years will finally be finished within the last eight weeks at most. The uncertainty seems to be more significant but lower in fact. UK has also agreed to share specific information with EU to end the dispute over the Irish border dispute. The no-deal Brexit has relatively low probability to occur which pull back the sterling back to 1.3 against USD.
Technically, the pair kept the uptick trend and broke the 1.31 level yesterday. Ascending channel is obvious. The next resistance level could be cast on 1.31396 level to challenge. On the 4h chart, the RSI closes to overbought ceilings. Resistance level could be around 1.30282 which is the low high point appeared on 8.30.
Traders should pay attention to the speech delivered by Mark Carney this evening with limited chance to talk about the monetary policy and the USA Retail Sales Control group index for August at midnight.

bullish for Sterling continued

Dec 01 2020