Sterling spikes down, as UK GDP misses estimates
The Sterling spiked to the downside across the currency markets as a result of UK GDP printing below expectations at 0.5%. The currency has suffered for an extended period of time as a result of a risk-off environment mixed with escalating fears of a slowdown in economic momentum in the UK. It seems that BoE Governor Mark Carney’s statement suggesting the ‘possibility’, rather than the ‘certainty’ of a UK rate hike has pushed back expectations deep into 2016. Economic data in October from the UK has lost its robust touch and with this GDP figure failing to meet expectations on Tuesday, Sterling has been left vulnerable. The GBPUSD, which had four consecutive days of declines last week, remains under pressure; a break below 1.5300 on this pair may open a path to the next relevant support at 1.5200.
The Dollar Index encountered an aggressive appreciation last week as a result of the ECB hinting of further QE in the future. Despite the index surging to 10-week highs, Dollar vulnerability still remains the main theme in the global currency markets.
This upside momentum may be short-lived as with only a slim chance that the US rates will be hiked in the FOMC statement this week, this currency will be left vulnerable which should result in the bears taking control once again. Sentiment remains bearish for the Dollar and the creeping fears of a potential slowdown in economic momentum in the States combined with the mounting concerns that GDP growth in the US for Q3 has shrunk, add to the already diminishing expectations of a rate hike in 2015.
Even though Gold has experienced a technical decline which started from the second week of October, it still remains fundamentally bullish. Whilst the sharp appreciation of the USD played a part in capping any upwards momentum in this precious metal, the renewed fears about the decelerating growth in China should provide a foundation for the Gold bulls to take centre stage once more.
this week, which most
are expecting to conclude with no action being taken by the Fed to hike US rates, may inspire upward momentum on the yellow metal, resulting in prices trading back above the 1170.00 resistance.
The EURCHF is technically bearish. Prices are trading below the daily 20 SMA and the MACD has crossed to the downside. As long as the 1.0900 resistance holds, there may be a decline to the next relevant support at 1.0700.
The EURJPY is technically bearish. Prices are trading below the daily 20 SMA and the MACD has crossed to the downside. A breakdown below the 133.00 support may open a path to the next relevant support at 131.00.
The CADJPY becomes technically bearish once a breach below the 91.00 support is achieved. Prices are currently trading below the daily 20 SMA and the MACD is in the process of crossing to the downside. The next relevant support is based at 89.00
The AUDCAD is technically bullish on the daily timeframe. A break above the 0.9580 resistance may open a path to the next relevant resistance based at 0.9650. Technical indicators such as the 20 SMA and MACD point to the upside.