The GBPUSD is trading at new session lows – falling below lower trend line support .
GBPUSD falls below lower trend line
The pair is trading at the lowest level since September 11, 2013. The high price from June 17th, 2013 comes in at 1.5750 and this is the next target followed by the 61.8% of the move up from the July 2013 low to the July 2014 high at the 1.5720 level.
The daily chart has the next targets at the 1.5750 and then 1.5720.
The BOE Inflation Report took the wind out of the sails for the GBPUSD. The pair toyed with the 50% of the move up from the 2013 low for the last six trading weeks. The price traded above and below that level during each of those weeks. Last week the price made more of a break lower. This week the high could only get up to 1.5945. The break away should give shorts more confidence to sell rallies in the pair now and put a ceiling against that level.
With the BOE now joining the weaker camp and the market pushing out tightening as a result, one wonders when the FOMC might signal a similar intention. With 2015 just a month and a half away, the time is ticking for the Fed officials to make their move.
IN the last survey of Fed officials as to what the midpoint of the target range would be in 2015, 15 of the officials saw a rate greater than 0.375. Three saw the rate at >0.875%. and 11 saw the midpoint greater thane 1.125%. Seems a bit far fetched, doesn’t it? If the Fed does change their view (the December FOMC meeting will be when the next Fed projections come out), it will likely slow the dollar climb. Until then, the GBPUSD will probably be a sell the rally pair and keep the bearish bias.
The Feds survey shows the Fed officials expectations for the midpoint of the target Fed Funds range.