Trading Forex and CFDs is risky

Sterling Swings and fails to hold gains

Market Analysis
2016-12-14_12-28-31

GBPUSD, Daily               

The pound failed to sustain post-data gains in a forex market lacking directional ambition in the proximity of the Fed’s policy announcement. Cable popped about 15 ticks to 1.2669 before the gains unravelled. Official data showed the UK jobless claimant count rising 2.4k in November, below the median forecast for a 5.5k rise and down from 13.3k in the previous month (which was revised up from 9.8k). The official unemployment figure for October remained unchanged at the cycle low of 4.8%, as expected. Household incomes unexpectedly rose, with the including-bonus figure for the three months to October lifting to a rate of 2.5% y/y. Overall, yet another decent report out of the UK, and this following November inflation data yesterday showing CPI lifting to a 25-month peak of 1.2% y/y, 0.3 of a percentage point up on October’s figure. The pound has been holding up well, showing a near 1% average gain on a w/w basis versus the G3 currencies, while both the 20-day and 50-day moving averages of Cable, presently situated at 1.2550 and 1.2420, respectively, are turning upward, reflective of the pound having found its feet over the last six weeks. The BoE’s shift from a dovish to a neutral bias has been a backdrop support for sterling, but as always trade with caution given the known unknowns of the drawn-out Brexit process.

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Stuart Cowell

Market Analyst

HotForex

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