The spot price for gold is up 4.06% from 1313.77 on 26th July to 1367.16 on 2nd August, a three week high. Sterling has rallied since 27th July against the dollar mainly as a result from the weakening of the dollar. Many investment firms hold a bearish view on the sterling, and the market has been pricing in lately. There are two key drivers for the trend of GBPUSD. The first one is the BoE’s announcement today at 12 pm GMT. If the BoE cut rates more than the expected 0.25% or launch a large-scale QE, then GBPUSD will likely plunge. By contrast, if the BoE keeps rates steady, then GBPUSD will likely rally. If BoE cut rate to 0.25% in line with the expectations along with modest stimulus measures, then GBPUSD will likely fall initially then followed by a rally as the market will price out. Apart from the decisions, it is important also keeping an eye on Mark Carney’s wording of the statement as it will also influence market sentiment. The second key driver on the trend of GBPUSD is the non farm payroll figure that will be released on Friday. The dollar index has rebounded since yesterday as the ADP Nonfarm Employment Change (the predictor of non farm payroll) outperformed. Yet on the 1 hourly and 4 hourly charts of the dollar index, the KDs are both at a high level, indicating a pullback before the release of NFP. On the 4 hourly chart, GBPUSD has been oscillating in an uptrend channel, breaking the 100% post-referendum Fibonacci retracement resistance at 1.3288 on 2nd August. Then the price oscillates within the range between 1.328 and 1.337. On the 1 hourly chart, the 8 EMA is crossing over 20 EMA from the top, indicating the trend is turning bearish as the dollar rebounds and the market expects the BoE’s to announce a rate cut today. GBPUSD is currently trading around the newly formed 100% post-referendum Fibonacci retracement support at 1.3288. With a confirmation of breakout, it will further test the support level at 1.327 followed by the daily time frame 8 EMA at 1.3254 and the downside uptrend line at 1.3226. Upside resistances at 1.3336 followed by 1.335, 1.337 and 1.34. Source: FX Pro Market Snapshot
The spot price for gold is up 4.06% from 1313.77 on 26th July to 1367.16 on 2nd August, a three week high. Sterling has rallied since 27th July against the dollar mainly as a result from the weakening of the dollar. Many investment firms hold a bearish view on the sterling, and the market has been pricing in lately. There are two key drivers for the trend of GBPUSD. The first one is the BoE’s announcement today at 12 pm GMT. If the BoE cut rates more than the expected 0.25% or launch a large-scale QE, then GBPUSD will likely plunge. By contrast, if the BoE keeps rates steady, then GBPUSD will likely rally. If BoE cut rate to 0.25% in line with the expectations along with modest stimulus measures, then GBPUSD will likely fall initially then followed by a rally as the market will price out. Apart from the decisions, it is important also keeping an eye on Mark Carney’s wording of the statement as it will also influence market sentiment. The second key driver on the trend of GBPUSD is the non farm payroll figure that will be released on Friday. The dollar index has rebounded since yesterday as the ADP Nonfarm Employment Change (the predictor of non farm payroll) outperformed. Yet on the 1 hourly and 4 hourly charts of the dollar index, the KDs are both at a high level, indicating a pullback before the release of NFP. On the 4 hourly chart, GBPUSD has been oscillating in an uptrend channel, breaking the 100% post-referendum Fibonacci retracement resistance at 1.3288 on 2nd August. Then the price oscillates within the range between 1.328 and 1.337. On the 1 hourly chart, the 8 EMA is crossing over 20 EMA from the top, indicating the trend is turning bearish as the dollar rebounds and the market expects the BoE’s to announce a rate cut today. GBPUSD is currently trading around the newly formed 100% post-referendum Fibonacci retracement support at 1.3288. With a confirmation of breakout, it will further test the support level at 1.327 followed by the daily time frame 8 EMA at 1.3254 and the downside uptrend line at 1.3226. Upside resistances at 1.3336 followed by 1.335, 1.337 and 1.34.
Source: FX Pro Market Snapshot
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