The British Pound enjoyed the mild FOMC Statement in the US to break above a minor resistance line and approach a much bigger one. Events ahead will probably stop it. Update.
GBP/USD broke last week’s high of 1.5220 and is now trading above 1.5250. This is the highest level in two and a half weeks, the highest in March so far. 1.5220 is a small technical barrier. A bigger hurdle is ahead:
The big hurdle is 1.5350. This line worked as a resistance and support line in May 2009, and supported the pair in mid February, before it made a big collapse downwards. Around 1.5350 there could be many stop orders that will slow the Pound’s movement and possibly send it back down.
As aforementioned, the Pound is enjoying the unchanged statement from the Federal Reserve. The FOMC repeated the wording that the interest rate will probably remain low for an extended period of time. Yet again, Thomas Hoeing, one of the members, voted to remove this morning. He remained the only one. So, the dollar bulls retreated again, and this is what pushes the Pound higher.
Britain is expecting two major releases. Employment figures consist of the Claimant Count Charge that disappointed with a rise last month. Another rise in the number of unemployed people is expected now. The second event is the MPC Meeting Minutes, which will show what the bankers think about future policy, especially regarding the QE program. These two events could sent the Pound back down.
Below 1.5220, the next serious line of support appears at 1.4870, followed by 1.4770, which supported the Pound when it collapsed. Above 1.5350, 1.5520 is a minor line, followed by 1.5833.
Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.
Share
