GBP/USD Extends Bearish Series Despite Hawkish BoE

Talking Points:

NZD/USD Fails to Test Nov High (0.7403) Ahead of RBNZ Rate Decision.

GBP/USD Extends Bearish Series Despite Hawkish BoE; Governor Carney on Tap.

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NZD/USD Daily Chart

Chart – Created Using Trading View

  • Despite a 1.3% allege in a Global Dairy Trade (GDT) Price Index, NZD/USD snaps behind from a uninformed 2017 high of 0.7375, with a miss of movement to exam a Nov high (0.7403) lifting a risk for a near-term exhaustion; a fibre of unsuccessful attempts to tighten above a Fibonacci overlie around 0.7330 (38.2% retracement) to 0.7350 (61.8% expansion) might open adult a downside targets generally as a Relative Strength Index (RSI) still responds to a bearish arrangement carried over from a summer months.
  • With Reserve Bank of New Zealand (RBNZ) Governor Graeme Wheeler scheduled to step down in September, a executive bank might hang with a standing quo via 2017 as Grant Spencer will perform a purpose of acting administrator from September 27 to Mar 18; in turn, a kiwi-dollar might carve a longer-term array of reduce highs lows as it mostly preserves a downward trending channel from September.
  • Will keep a tighten on a monthly opening range, with a break/close subsequent 0.7240 (61.8% retracement) opening adult a subsequent downside area of seductiveness around 0.7200 (38.2% retracement) followed 0.7100 (38.2% expansion).


GBP/USD Daily Chart

Chart – Created Using Trading View

  • GBP/USD extends a new array of reduce highs lows while Bank of England (BoE) house member Kristin Forbes highlights a hawkish opinion for financial and warns a executive bank might have to lift a benchmark seductiveness rate ‘even if it means reversing new adjustments;’ a near-term opinion for GBP/USD stays slanted to a downside following a unsuccessful run during a Dec high (1.2775), though a pound-dollar might continue to lane a operation carried over from late-2016 as a Monetary Policy Committee (MPC) appears to be on march to pierce divided from a easing-cycle.
  • With BoE Governor Mark Carney scheduled to pronounce on Thursday, another collection of hawkish tongue might border a downside risk for argent as a executive bank steadfastly warns ‘there are boundary to a border that above-target acceleration can be tolerated,’ though a British Pound stays during risk of confronting headwinds via 2017 as a U.K.’s depart from a European Union (EU) clouds a mercantile outlook.
  • A tighten subsequent .

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  • The DailyFX Speculative Sentiment Index (SSI) shows a sell throng stays net-long GBP/USD given Feb 2, with view attack a 2017-extreme of +3.45 during a prior month, while traders have been net-short NZD/USD given Jan 12.
  • GBP/USD SSI sits during +1.75 as 64% of traders are long, with prolonged positions 15.6% aloft from a prior week, while open seductiveness stands 4.3% above a monthly average.
  • NZD/USD SSI sits during -1.75 as 36% of traders are long, with prolonged positions 16.3% aloft from a prior week, while open seductiveness stands 6.6%b above a 30-day average.
  • As NZD/USD SSI narrows from a new impassioned of -2.51, might see a serve composition in sell positioning should a kiwi-dollar onslaught to safety a allege from progressing this year.

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— Written by David Song, Currency Analyst

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