GBP/USD: Breaking Ascending Triangle
Neal Gilbert | Mar 26, 2015 04:26PM ET
The second half of Thursday's North American trade was notably more somber as the world became aware of the events leading up to the Germanwings plane crash earlier this week. While financially important events like speeches by central bankers were happening, they all seemed to fade into the background as more important societal elements were the main topic of discussion. Amidst all this contemplation of human depravity, US equity markets maintained their early momentum and steadily rose throughout the day. Commodities were mixed and the USD tried to remember what it was like to be the most dominant currency on the planet.
One currency against which the USD fared well was the GBP. The UK actually released some pretty decent economic figuresjust before Thursday's US open. UK Retail Sales rose 0.7%, which beat consensus as the previous figure was revised upward. Also, CBI Realized Sales also rose more than anticipated. However, once US data came out, which was also generally better than consensus, the GBP/USD began a move lower, which erased nearly 200 pips of progress since last week. The move lower also broke below a rising trend line that helped form an ascending triangle prime for a breakout to the topside. However, considering the pattern couldn’t be maintained, the case for a move lower may be more compelling as the USD could be heading back to its throne.
While we can’t completely rule out the potential for this pair to flip the script and break the 1.50 level as we head in to the weekend, it's looking more and more unlikely. Outside of the immediate post-Federal Reserve move, this pair hasn’t been able to advance beyond that imaginary Maginot Line. And it may now have help keeping the pair capped with the previous rising trend-line support turned resistance.
Source: www.forex.com
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