GBPUSD, H1
Cable printed a fresh seven-session high at 1.3267, since pulling back to the 1.3245 area, but still showing a 0.2% gain on the day. GBPJPY has been a notably gainer, along with other Yen crosses as stock markets rally in Europe. Sterling was buoyed by yesterday’s release of an above-forecast UK services PMI survey, completing a set of June PMI surveys that painted a picture of rekindled expansion in the economy, with cost pressures rising and some evident tightness in labour markets. The data maintains the pressure for BoE to continue with its gradualist tightening at the August MPC meeting. A number of Sterling crosses have gained additional traction in the last few days. In the longer term, the Brexit negotiation process, which has just six negotiating weeks left, is coming to a head amid the risky scenario -where the UK leaves the EU without a new trade-deal – that has gone from highly unlikely to possible. PM May has a crunch meeting, scheduled for tomorrow, with sceptical Cabinet colleagues trying to agree a new “third option” for the Irish border issue. Cable has immediate support at 1.3230 (20 period moving average) and 1.3215 (daily pivot point), with initial resistance at 1.3252 (upper Bollinger band) and 1.3260 (daily R1).
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Stuart Cowell
Senior Market Analyst
HotForex
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