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GBP/USD Market Rejects Rally on Back of BoE Statement
- 1H: The GBP/USD was struggling to rally as it neared short-term resistance around the 1.6750 area. (Refer to Daily Technical Update 11.10.2009 GBP/USD and Daily Video Technical Update 11.10.2009).
- In the European session, the pair made another attempt to rally, but hit a wall as the BoE mentioned “open mind” to further bond purchases as its valuation of the economy is a “hard path” to recovery. This is a event risk and may invalidate our bullish outlook.
- On one hand, this bullish case is weakened, at least in the short-term. Our bearish candles on the left and right of our struggling rally gives the bearish outlook a slight bias, given everything else the same. Also the stochastic was able to have momentum swing to almost oversold area.
- However, looking at the tops and bottoms, we actually still established a higher high a 1.6800 and a higher low, that is if the current low at 1.6615 holds.
- In today’s US session, we should see if the 1.6600 can hold. The market is also testing the upsloping trendline again. A hold and a rebound can suggest the temporary nature of the overnight event risk.
Fan Yang
Currency Analyst,
Commodity Trading Advisor
