GBP/USD nosedived on Friday after Bank of England’s Mark Carney comments about interest rate however on Monday we saw a rebound from 50% fib level and since then cable is continuing upward movement.
At the moment of writing in Asian session the pair is being traded at 1.6611 thus threatening the swing high of current wave which is at 1.6667. The pair may find resistance at 1.6640 which is 200 Simple Moving Average (SMA) on monthly chart. Above this level 1.6745 is next crucial resistance which is high of April 2011.
On downside support may be noted around 1.6487, 50% fib level of recent move, ahead of 1.6445, 61.8% fib level. A break below this support zone may target 1.6393 which is a confluence of 55 DMA and 76% fib level. This is also last major support ahead of previous swing low. In order to be in bullish momentum, cable has to print a Higher Low (HL) failing to which shall turn our bias into bearish.
It is pertinent to mention here that today in London session a very major report about Britain’s fourth quarter Gross Domestic Product (GDP) is scheduled for release. Analysts have predicted a slowdown in growth this time around as compared to previous quarter. According to median projection of analysts UK’s fourth quarter GDP is likely to be 0.7% against previous quarter’s 0.8%. Year on Year (YoY) growth is however expected to improve.
Elsewhere US Durable Goods Orders report for the month of December is also due later in the US session. Analysts have predicted a decrease in orders to 1.8% as compared to 3.4% reading recorded last month. Furthermore, FOMC monetary policy meeting is also scheduled to commence today where policymakers are expected to announce more trimming in bond buying program worth $75 billion.