GBP/USD is still on the downside with limited loss

Feb 16, 2014
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Houston, Tx
The pound continued to be lower against the U.S. dollar on Monday, although it was floating withing close distance of a four-year high amid expectations that the Bank of England may raise rates next year.

GBP/USD struck 1.6710 throughout U.S. morning trade, the session reduced; the pair subsequently consolidated at 1.6723, slipping 0.16 %.

Cable television was likely to discover support at 1.6645, the reduced of February 14 and resistance at 1.6823, the session high and a four-year high.

The pound remained supported after the BoE raised its U.K. financial growth forecast for 2014 to 3.4 % from 2.8 % last week, and showed that it may raise interest rates next year.

In its quarterly inflation report, the bank likewise upgraded its forward assistance on bank rates, saying it will not raise rates up until the spare capability in the U.K. economy has been completely absorbed, which it sees taking place in 2015.

On the other hand, the dollar stayed under pressure after information on Friday showing that U.S. factory output fell all of a sudden in January clouded the outlook for the economic recovery.

Trade volumes were anticipated to stay thin on Monday, with U.S. markets shut for the Head of state's Day holiday.

Sterling was lower versus the euro, with EUR/GBP increasing 0.24 % to 0.8195.

Need for the euro remained underpinned after Friday's better-than-expected euro zone 4th quarter growth information alleviated concerns that the European Central Bank could tighten up monetary policy at its next conference.

Also supporting the euro, ECB regulating council member Ewald Nowotny shared Monday the banks bond buying program is "not that relevant" anymore, because of the improved financial situation.


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Rambo35

Confirmed PaxForex Representative
Apr 22, 2013
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Canada
The recent correction in the GBPUSD presented an excellent buying opportunity; today's drop below 1.6600 is where I added to my longs.