GBPUSD rises on upbeat UK earnings but key 1.41 barrier is still intact; focus turns to FOMC
Sterling jumped above Tuesday’s high at 1.4066, boosted by better than expected UK earnings data and pressures strong barriers at 1.4088 (Monday’s spike high) and 1.4102 (Fibo 61.8% of 1.4345/1.3711 descend).
Upbeat UK earnings (including bonus) in Jan (2.8% vs 2.6% f/c and upward-revised 2.7% in Dec) supports hawks who are looking for more rate hikes in 2018 and maintain positive outlook for sterling, which was boosted by recent news of positive movements in Brexit talks.
Additional support comes from Unemployment rate which dipped back to four decade low at 4.3%, but positive impact was overshadowed by increase in jobless claims which rose by 9.2K in Feb vs -3.1K forecast and previous month’s downward-revised result at -1.6K.
Positive UK data came as support for bullish techs (daily MA’s in bullish setup and formed multiple bull-crosses) and 14-d momentum continues to head north in positive territory.
Also, daily Ichimoku cloud is thickening and continues to underpin the action.
Bulls need firm break above 1.41 zone to signal continuation and expose initial barrier at 1.4144 (16 Feb lower top) with extension higher to look for 1.4195 (Fibo 76.4% of 1.4345/1.3711 fall).
Broken Fibo 50% barrier marks initial support at 1.4028, guarding strong support at key 1.40 zone, which is expected to keep the downside protected.
Focus now turns towards FOMC verdict which is next key event today and expected to provide strong direction signals.
Res: 1.4088; 1.4102; 1.4144; 1.4195
Sup: 1.4028; 1.4000; 1.3961; 1.3946