At the start of a week full of US earnings, important economic data and a couple of central bank meetings, risk is somewhat off the menu. Equities, copper and, to a lesser degree, oil prices were all trading lower at the time of this writing.
News that the UK manufacturing activity in September hit its highest level since June 2014 has provided a welcome relief for sterling.
GBPUSD’s downward movement from 1.3445 extended to as low as 1.2914.
GBPUSD is facing the resistance of the downward trend line on 4-hour chart.
Following the recent improvement in UK data, the Bank of England was widely expected to sound a little more upbeat about the economic outlook with virtually no one forecasting any further easing of monetary policy.
ECB’s inaction clearly disappointed a few people as European stock indices dropped when the policy statement was released.
The GBPUSD pair fell significantly during the course of the day on Wednesday, as we found quite a bit of resistance in the area of 1.34 above.
GBPUSD remains in downtrend from 1.3278. The rise from 1.3059 is likely correction of the downtrend.
The GBPUSD pair initially tried to rally during the course of the day on Friday but turned right back around to form a shooting star. The shooting star sitting just below the 1.32 level suggests that we could see more selling.
The GBPUSD ended higher last week on the back of surprisingly stronger-than-expected UK economic data and as the dollar eased along with expectations about an imminent rate hike in the US.
