Stock market today: S&P 500 slips as Trump’s tariff salvo sours sentiment
In the last month the GBP/USD has rallied well and surged higher to move back up strongly through numerous levels which was punctuated by a push through to its highest level for the year just above 1.6250. For the last couple of weeks however it has been easing back towards 1.60 and 1.5950. Over the last week it has been relying on support from 1.5950 which has allowed it time to consolidate a little and in the last 24 hours it has fallen heavily and rallied just as strongly but it has run into the resistance at 1.60 again. A few weeks ago it first found solid support from the 1.5950 level which helped it move well up to the 1.6250 level, and it is relying on this level again presently. It did stall around 1.59 to 1.5950 for a few days a few weeks ago before clearing this area of congestion. About a month ago it fell down to a two week low near 1.54 before rallying back towards 1.5550. The week before it did well to maintain its level above the key 1.56 level and in the process moving to a new two month high above 1.57 which has now been surpassed by the recent high. It immediately retreated strongly but continued to receive solid support from the 1.56 level before closing below at the end of that week.
Back in the middle of August the pound surged higher to through the resistance level at 1.56 to a then two month high around 1.5650, before spending the next few days consolidating and trading within a narrow range around 1.5650, receiving support from the key 1.56 level. A couple of months ago the resistance level at 1.54 was proving to be quite solid, and once it broke through the pound surged higher to a new seven week high near 1.56 in a solid 48 hour period run. In the week leading up to this the pound had recovered strongly and returned to the previous resistance level at 1.54 after the week earlier undoing some of its good work and falling away sharply from the resistance level at 1.54 back down to around 1.5150 and a two week low. A few weeks ago the 1.54 resistance level stood firm and the pound fell away heavily, however the 1.51 support level proved decisive and helped the pound rally strongly.
Earlier in July after having done very little for about a week, the GBP/USD started to move and surge higher and move through the 1.52 and 1.53 levels to the one month high above 1.54. Prior to the move higher, it moved very little as it found solid support at 1.51 and traded within a narrow range above this level. It established a trading range in between 1.51 and 1.52 after it took a breather from its excitement just prior when it experienced a strong surge higher moving back to within reach of the 1.52 level from below 1.49, all in 24 hours. About a month ago it did well to climb off the canvas and move back above 1.49 and towards 1.50 again before seeing the pound reverse and head back down below 1.49 to reach a new multi-year low near 1.48. It experienced sharp falls moving from 1.53 down to the key long term level of 1.50 and then through 1.49. That movement saw it resume its already well established medium term down trend from the second half of June and move it to a four month low.
In the UK, Tuesday's highlight was CPI, one of the most important economic indicators. The index has been quite steady, and posted a gain of 2.7% for the second straight month. This edged past the estimate of 2.6%. Most of the other inflation indicators were within expectations. PPI Input, an important manufacturing inflation index, posted a second straight decline, dropping by 1.2%, well off the estimate of -0.1%. The pound showed little reaction to today's releases, but it could be a different story on Wednesday, when Claimant Count Change will be released. GBP/USD" title="GBP/USD" src="https://d1-invdn-com.akamaized.net/content/pic891b8bcc6911493a8183f02dffd24ed0.gif" height="252" width="550">
GBP/USD October 16 at 00:35 GMT 1.5975 H: 1.6011 L: 1.5915GBP/USD Technical" title="GBP/USD Technical" src="https://d1-invdn-com.akamaized.net/content/pic278e71925b9fdf1ecb387097ccd6459c.png" height="128" width="667">
During the early hours of the Asian trading session on Wednesday, the GBP/USD is retreating away from the resistance level at 1.60. Since the middle of June the pound has fallen very strongly from the resistance level at 1.57 back down towards the long term key level at 1.50 and is now enjoying a solid resurgence over the last couple of months moving back to above 1.62 and its highest point for the year. Current range: Right below 1.6000 around 1.5975.
Further levels in both directions:
• Below: 1.5950 and 1.5800.
• Above: 1.6000, 1.6100 and 1.6250.
OANDA’s Open Position Ratios
(Shows the ratio of long vs. short positions held for the GBP/USD among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)
The GBP/USD long positions ratio has moved back below 30% again as the GBP/USD has pushed back above 1.5950. Trader sentiment remains heavily in favour of short positions.
Economic Releases
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- 08:30 UK Average Earnings (incl. bonus) (Aug)
- 08:30 UK Claimant Count Change (Sep)
- 08:30 UK Claimant Count Rate (Sep)
- 08:30 UK ILO Unemployment Rate (Aug)
- 09:00 EU HICP (Final) (Sep)
- 09:00 EU Trade Balance (Aug)
- 12:30 CA Manufacturing sales (Aug)
*All release times are GMT
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