GBPUSD – Is This Real Break In Pound To Dollar?19 April, 2017 by Aayush Jindal in Market Analysis
- The British Pound after a steady rise gained momentum against the US Dollar, and moved above 1.2600.
- There is a major bullish trend line with support at 1.2620 formed on the 4-hours chart of GBPUSD.
- Recently in the US, the Industrial Production for March 2017 released by the Board of Governors of the Federal Reserve posted an increase of 0.5%.
- Today’s main release will be the Euro Zone CPI by the Eurostat for March 2017 (YoY) with expectation of 1.5% increase.
GBPUSD Technical Analysis
The British Pound after trading as low as 1.2365 against the US Dollar started an uptrend. Later, comments of UK’s PM Theresa May sparked a sharp upside in GBPUSD.
UK’s PM Theresa May stated that an early election is a possibility in order to provide stability and good reforms. It ignited a lot of volatility in GBPUSD, and pushed it higher by more than 120 pips.
The pair broke to the upside, and cleared the 1.2580-1.2600 resistance. The upside move was such that there was a close above the 1.2650 resistance as well.
Overall, the current trend is super bullish for GBPUSD, and any pullbacks from the current levels could be seen as buying opportunity in the short term. And, this is why the recent break can be seen as a real upside break.
US Industrial Production
Recently in the US, the Industrial Production for March 2017 was released by the Board of Governors of the Federal Reserve. The market was expecting an increase of 0.5% in the production in March 2017, compared with the previous month.
The real outcome was positive, as the Industrial Production increased 0.5% in March 2017. The report stated that the “increase in March was more than accounted for by a jump of 8.6 percent in the output of utilities—the largest in the history of the index—as the demand for heating returned to seasonal norms after being suppressed by unusually warm weather in February”. Overall, the result was positive, but the current trend is likely in favor of more gains in GBPUSD in the near term.
Economic Releases to Watch Today
- Euro Zone CPI for March 2017 – Forecast +1.5% (YoY) versus +1.5% previous.
- Euro Zone CPI for March 2017 – Forecast +0.3% (MoM) versus +0.4% previous.
- Euro Zone Core PI for March 2017 – Forecast +0.7% (YoY) versus +0.7% previous.
- Euro Zone Trade Balance Feb 2017 – Forecast €16.2B versus €-0.6B previous.