- RSI is lower on the back of the day’s bear trend and is a touch away from oversold territory at 30; Eyes are on 1.3040.
- Greenback was stronger on trade balance numbers/durable goods.
GBP/USD has been attempting a minor recovery from the lows of 1.3126 where the dollar’s advance paused as we progress through the NY session.
The greenback was stronger on trade balance numbers and some of the details behind the durables goods orders while the pound slumped a little during Carney’s mention that global risk had intensified during the BoE’s financial stability review. Cable fell over a cent from 1.3237.
Carney’s comments:
- Global trade tensions have intensified.
- Global risks could crystallise longstanding risks of a snap back in interest rates.
- UK consumer, company debt-service burdens are low.
- Banks’ capital has risen, can withstand a Brexit shock.
- Rising protectionist sentiment could sap strength of global economy.
- Mitigating cliff-edge Brexit risks to financial system also rely on efforts from EU.
Meanwhile, DXY hlds firm at the top of the 94.5260-95.1560 range at 95.1260 at the time of writing. However, US 10 year yields are off from the day’s highs between the 2.83%-2.88% range at 2.84%, -1.21%. Cable is looking towards a close at the lowest levels since November last year, while 20th June business took the pair down to as low as 1.3101, but bulls managed a close at 1.3244.
GBP/USD levels
RSI is lower on the back of the day’s bear trend and is a touch away from oversold territory at 30 while the 10-D SMA caps recovery attempts within the descending channel. Eyes are on 1.3040, as the Nov 3 low on a break of 1.3100 and previous June low. On the flipside, a break above the 10-D SMA at 1.3235, there is scope for a test of the 21-D SMA at 1.3308. 1.3504 (50-D SMA) comes before the convergence of the 200-D SMA and 1.3583/1.3600 tops come as the upside target while the 1.3708 level at the 50% Fib of 1.3040-1.4377 remains compelling on the wide.
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