GBP/USD: pops on dollar weakness, capped by 100-hr SMA
- GBP/USD: spikes as dollar weakness a touch.
- GBP/USD bears remain in control at 200-D SMA.
GBP/USD has spiked to the 100-D SMA as the dollar tails off ahead of Trumps' announcements on Iran at 1800GMT and despite Powell's hawkish rhetoric this morning. Currently, GBP/USD is trading at 1.3551, down -0.05% on the day, having posted a daily high at 1.3594 and low at 1.3485.
GBP/USD has been on the backfoot from 1.3593 down to the aforementioned lows. The US Federal Reserve chairman Jerome Powell warned today that some investors may not be well positioned for anticipated US interest rate hikes, triggering US Dollar appreciation.
Meanwhile, there have been some market jitters with a drop in the price of oil when headlines were crossing the wires suggesting that Trump will not just take an axe to the nuclear deal. However, by imposing sanctions, this will essentially 'disturb' the deal between Iran and other nations.
WTI drops hard on Iran noise, Trump to allow sanctions to go forward
BoE on the cards this week
Soon enough, however, the markets will turn to the BoE. There is virtually no chance of a rate hike but the risk is in the rhetoric from the MPC and guidance as t what and when the next move might be. The BoE will meet this week on the 10th.
GBP/USD levels
The price is stuck to the 200-D SMA, capped at 100-hr SMA, while bears can target the 1.33's and Dec 15's low. On the flip side, the bulls need to get to and hold above the 200-W SMA 1.4200 with closes through the recent high if there is going to be a run towards 1.5022 on the very wide. In hindsight, the bear engulfing weekly stick was the big give away.