What?s Next For British Pound?

What?s Next For British Pound?

By: Oliver Miller | Where To Trade | On:07-01-2015 11:12
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Key Highlights

  • British pound continued to trade lower against the US dollar and might head towards 1.50.

  • Euro also looks set for more losses as the Euro buyers continue to struggle against the US dollar.

  • In Australia, AIG Performance of Services Index released by the Australian Industry Group came in at 47.5, compared with the last reading of 43.8.

  • New Zealand ANZ Commodity Price released by the ANZ National Bank registered an increase of -4.4%, compared with the last time decline of 1.6%.

  • In the UK, the British Retail Consortium (BRC) Shop Price Index was released which came in at -1.7% in December 2014 whereas the last reading was of -1.9%.

  • German unemployment and Euro area consumer price index are major releases lined up today during the London session.

  • US dollar might continue to surge higher against the Swiss franc as well in the near term.

GBPUSD

The British pound managed to climb higher against the US dollar towards the 1.5250-80 area where it found sellers. The GBPUSD pair failed around an important bearish trend line on the hourly chart, which ignited a down-move in the pair. The recent releases in the UK were not encouraging enough to lift the GBPUSD pair. The pair dived and it looks like it might even break the 1.5100 support area moving ahead. The 100 and 200 hour moving averages are way above the current levels, which might cause a minor pullback in the pair, but that cannot be considered as a reversal as long as the pair remains in the negative territory.

Intraday Support Level – 1.5100

Intraday Resistance Level – 1.5220

  • Overall, as long as the pair is below the 1.5220 level it might continue trading lower.

  • A break above the highlighted trend line could take the pair towards the 1.5350 level.

If the GBPUSD pair climbs higher from here, then initial resistance is seen around the highlighted trend line. Only a break and close above the same might push the pair towards the gap close level where sellers might appear again.

USDCHF

The US dollar surged higher against the Swiss franc and even spiked to trade as high as 1.0290 where the pair failed miserably and traded lower. The USDCHF pair is currently consolidating in a range and forming a monster support around the 1.0040-20 area as there is a bullish trend line as well. Moreover, the 61.8% fib retracement level of the last leg from the 0.9887 low to 1.0290 high is also sitting around the same level. If the pair moves lower from the current levels, then it might find support around 1.0040-20 area.

Intraday Support Level – 1.0020

Intraday Resistance Level – 1.0150

  • Buying dips around the 1.0020 level look like a good option.

  • A break below the same would call for losses moving ahead.

On the upside, initial resistance is around the 1.0130 level, followed by the 1.0150 level. Let us see how the US dollar trades during the coming sessions and whether it can correct lower or not.

Oliver Miller

Oliver Miller

"Patience is the key for success"

Oliver Miller is one of the best financial analyst with 18 years of online trading experience

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