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9 Sep 2013
GBP/USD rejected around 1.5740
FXstreet.com (Edinburgh) -The GBP/USD is on the brink of testing June highs beyond 1.5750 on Monday, as the bid tone around the sterling and in risk-associated assets continue to prevail amongst traders.
GBP/USD consolidating beyond 1.5700
The pair is extending its ongoing rally, rapidly leaving behind the 1.5700 handle to test multi-week peaks around 1.5730. The risk-on trade continues to dominate the FX markets at the beginning of the week, although price action and volatility may be exaggerated due to the lack of events in both EMU and US dockets. Paul Robson, Senior FX Strategist at RBS assessed, “we still believe the balance of risks favours a weaker GBP through the rest of the year as we are not as confident as most about the sustainability of the UK recovery. We believe there is a risk that business survey data are exaggerating the pace of recovery and that consumer spending will fail to maintain the recent pace of recovery given weak real income growth. We continue to expect GBP/USD will be closer to 1.45 than 1.60 by the end of the year”.
GBP/USD levels to watch
The pair is now up 0.63% at 1.5730 facing the next resistance at 1.5753 (high Jun.17) followed by 1.5782 (61.8% of 1.6380-1.4814) and then 1.5810 (high Feb.11). On the flip side, a breakdown of 1.5632 (low Sep.9) would expose 1.5567 (MA10d) and finally 1.5564 (low Sep.6).
GBP/USD consolidating beyond 1.5700
The pair is extending its ongoing rally, rapidly leaving behind the 1.5700 handle to test multi-week peaks around 1.5730. The risk-on trade continues to dominate the FX markets at the beginning of the week, although price action and volatility may be exaggerated due to the lack of events in both EMU and US dockets. Paul Robson, Senior FX Strategist at RBS assessed, “we still believe the balance of risks favours a weaker GBP through the rest of the year as we are not as confident as most about the sustainability of the UK recovery. We believe there is a risk that business survey data are exaggerating the pace of recovery and that consumer spending will fail to maintain the recent pace of recovery given weak real income growth. We continue to expect GBP/USD will be closer to 1.45 than 1.60 by the end of the year”.
GBP/USD levels to watch
The pair is now up 0.63% at 1.5730 facing the next resistance at 1.5753 (high Jun.17) followed by 1.5782 (61.8% of 1.6380-1.4814) and then 1.5810 (high Feb.11). On the flip side, a breakdown of 1.5632 (low Sep.9) would expose 1.5567 (MA10d) and finally 1.5564 (low Sep.6).