This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
GBP/USD retains $1.54
There has been consolidation in the $1.5430 region, and the market is not expecting any major swings today as it is Presidents Day in the US.
Sterling made great strides last week to buck the downward trend it has been in against the dollar. We are not expecting any major economic data out of the UK today, but the market is already looking ahead to tomorrow’s CPI report, and the consensus is for a reading of 0.3%.
Mark Carney has already warned that the UK could encounter deflation in the near-term, and he would cut rates if necessary. If the report misses estimates it will put pressure on the pound.
GBP/USD is receiving support at $1.54 and if this level is held it will make $1.55 the initial target. Beyond that traders will look to the 100-day moving average of $1.5524. A move below $1.54 will turn the level into resistance and support will be found in the $1.5340 region; If that mark is punctured $1.53 will be in sight.