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28 Aug 2015
GBP/USD : London closing, squaring the short side
FXStreet (Guatemala) - GBP/USD is better bid in the London closing hour as traders square up for a long weekend, heavily in the red for the week as one of the worst performers on Black monday week.
GBP/USD is a little firmer progressing through the US morning with MACD picking up on the shorter-term time frames, with price targeting 1.5400 and the 50 SMA. The pound is one of the worst performers this week after Black Monday with a lack of fundamental support from the calendar and rumours that overseas investors were bailing out on the UK property were a factor at play.
EUR/GBP was the catalyst
The euro was the main catalyst that was triggered the shorts in sterling on the cross as investors unwound the short euro play on risk aversion. Also, the US has been performing very strongly on the data front, underpinning weakness in the pound this week. However, we are now into end of month flows as the UK has a bank holiday on Monday and London traders will have been getting long of the pound over the last couple of hours and squaring up vs the overall short play on the week.
BoE will come back to focus and potentially support the pound
Then we are over to the BoE next month on the 10th for both the Monetary Policy Committee Announcement and Minutes. They last left the Bank Rate at 0.5% and the size of the Asset Purchase Programme at £375 billion, and we are not expecting a deviation from that, but considering the recent heightened uncertainty in global financial markets, it will be interesting to know their take on it and whether there will indeed be any direct or indirect forward guidance in terms of timings of when the BoE might hike rates next year as widely expected.
GBP/USD is a little firmer progressing through the US morning with MACD picking up on the shorter-term time frames, with price targeting 1.5400 and the 50 SMA. The pound is one of the worst performers this week after Black Monday with a lack of fundamental support from the calendar and rumours that overseas investors were bailing out on the UK property were a factor at play.
EUR/GBP was the catalyst
The euro was the main catalyst that was triggered the shorts in sterling on the cross as investors unwound the short euro play on risk aversion. Also, the US has been performing very strongly on the data front, underpinning weakness in the pound this week. However, we are now into end of month flows as the UK has a bank holiday on Monday and London traders will have been getting long of the pound over the last couple of hours and squaring up vs the overall short play on the week.
BoE will come back to focus and potentially support the pound
Then we are over to the BoE next month on the 10th for both the Monetary Policy Committee Announcement and Minutes. They last left the Bank Rate at 0.5% and the size of the Asset Purchase Programme at £375 billion, and we are not expecting a deviation from that, but considering the recent heightened uncertainty in global financial markets, it will be interesting to know their take on it and whether there will indeed be any direct or indirect forward guidance in terms of timings of when the BoE might hike rates next year as widely expected.