Tuesday, October 13, 2015

GBP/USD due a minor correction at tough resistance?

FXStreet (Guatemala) - GBP/USD continues to oscillate around the 200 DMA at 1.5319, but has managed to score a high of 1.5371 today, falling short of last week's and October's high of 1.5382 with EUR/GBP demand capping the major.

The main focus for the week will be the CPI's for both the UK and US as well as the claimant count in the UK and industrial production and retail sales for the US. We also have the beige book ahead of the 27-28 October FOMC meeting and while keeping in mind the similarity between the two central banks rhetoric for normalizing interest rates.

In respect to the BoE, analysts at HSBC explained, "We still think the BoE could increase rates in Q1 2016, provided that the Fed moves in December, because the output gap is closing and wage growth rising. We forecast two more interest rate rises in 2017, meaning the Bank Rate will be just 1.5% at the end of that year."

GBP/USD meets tough resistance

Technically, Karen Jones, chief analyst at Commerzbank explained that GBP/USD's bounce is reaching tougher resistance and we should see this now start to struggle. "We note that the Elliott wave count is more positive and while the market intraday holds over 1.5230/25 there is a risk of a move towards the 1.5436 55 day ma and the 1.5492 cloud."
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