While the GBPUSD rate (Cable) has
managed to creep above its 200 period Simple Moving Average (SMA), it is having
difficulty making at above two other levels of resistance that have been in
play for some time now. These are the high set during August of 2009, all of
five years ago, and the psychologically important round figure of 1.70 GBP to
the US dollar.
The market is fairly moribund at the
moment, and we would like to see more volatility in order to be confident that
the levels mentioned above can be breached in a sustained manner.
Poor
US data fails to impact
There were two data releases in the
US yesterday, both of which would have been calculated to cause a weakening of
the dollar (and a consequent rise in the GBPUSD pair). These were the revision
of the US Gross Domestic Product (GDP) figure for the first quarter, which came
in much lower than expected (a contraction of 2.9%), and durable goods figures that also were very much lower than had been
expected (a drop of 0.1% against a rise of 0.4% for the previous month).
As each of those releases is calculated
to stave off any thoughts of interest rate rises by the US Federal Reserve, they
resulted in a small increase in GDPUSD immediately after they hit the wires. This,
however, was quickly given back to leave the level largely unchanged. Such a
rejection of news is an indication that the resistance discussed above has the
potential to hold.
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