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GBPUSD experienced correction in recent days after surging to 1.25118 on Monday due to comments of MPC members.

At 15:02 (GMT+7), GBPUSD trades at 1.24142, down 0.16% compared to the open price.

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Fig GBPUSD D1 Chart

Factors that cover GBP

Bank of England Board members signaled some stimulus monetary policies, which boost the value of the sterling.

Office for Budget Responsibility forecast that Brexit would cost about 600 billion pounds in extra borrowing and the economy may have to experience difficult situation in the future. However, after the forecast released, OBR had to receive some critical from Conservative lawmakers. They supposed that OBR had overstated the negative impacts of Brexit on U.K economy, while the economy still has performed quite well as consumers price still increased and retail sales released last week beat the expectation with 1.9% gain. Ms. Forbe, one of members in Bank of England’s Monetary Policy Committee said,”Despite this heightened discussion about uncertainty, UK economic performance has been solid.” This comment would have some positive impacts on the value of sterling recently.

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In addition, there are some indicators of GBP economy that investors should focus on this week. The first important one is second estimate GDP Q3 growth quarter-on-quarter. It is expected to be 0.5%, in line with the preliminary estimate. Besides that, analysts expect preliminary business investment to fall 0.2% in Q3, although this data in Q2 saw a 1.0% increase.

Factors that cover USD

On Thursday, USD is still in the uptrend despite mixed economic data.

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Fig USDX D1 Chart

One of the most important indicators is unemployment claims, which increased 251,000 last week, more than the expected number of 241,000. The number of people who applied for unemployment insurance in the previous week was just 233,000. Another report launched by U.S Department Commerce showed that U.S new home sales last month saw a 1.9% decline, disappointing the expectation of 0.3% rise.

However, some other data, by contrast, showed the positive signs of U.S economy. U.S durable goods order in October increased 4.8% from the number in September, beating the expectation of 1.2% rise. This data in September disappointed the market while falling 0.3% compared to in August. Besides, the data drawing more attraction is core durable goods order, which excludes transportation items. It gained 1.0% last month, much better than 0.2% expected raise.

In addition, University of Michigan released its consumer sentiment figure. In November, consumer sentiment index climbed to 93.8, higher than the data of 91.6 last month. Analysts had expected this data this month to be in line with that in October. Besides, University of Michigan inflation expectations in November were 2.4%, lower than the expectation of 2.7% in October.

This week, the market waited to see FOMC November meeting minutes. Investors received some hawkish signs from FOMC members. According to Fed’s minutes, most Fed officials said that it would be appropriate to hike interest rate “relatively soon”.

Before that, the dollar had been boosted due to Trump’s victory to be the next U.S President. He announced that he would increase fiscal spending and tax cut, which encourages the economy. His fiscal stimulus plan would raise the chance of Fed rate hike, supporting the value of greenback.

On Friday, the market should focus on some U.S economy data to catch more information to forecast U.S dollar value. Goods trade balance and preliminary wholesale inventories are two of them.

Technical Analysis

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Fig GBPUSD D1 chart

The price line is heading down and touching the middle line in Bollinger Band. The line might bounce back to the middle band.

ADX (14) is at 17.9965, indicating that the market is now ranging. Besides the last candle was spinning top, signaling that there were not significant between buyer’s and seller’s power.

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Fig GBPUSD H4 chart

MA 10 has crossed MA 20, but the difference between 2 MA lines is still negligible. Besides, RSI (14) is hovering around 50 level, indicating the balance between buyers and sellers. MACD is moving near 0.00, which means EMA 12 is really close with EMA 26.

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