Forex: GBP/USD logs 4.48% 4-week gain

on Dec 2, 2013
Updated: Oct 21, 2019
Listen Monday, December 2nd:_ The GBP/USD last week gained 1.47 percent in closing at 1.6368 and thus scored a fourth consecutive week of rises, adding up to 4.48 percent in total.

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Last week’s price action broke above the trendline which has been coming down through the tops since 1 October. The price also went through the 1.6300 psychological level from which the pair was strongly sold off between 29 April and 30 December last year.
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November’s uptick came when the price refused to fall on a series of trend reversal patterns (head and shoulders, double and triple tops) which should have pushed the pair south by some three percent from the necklines of those figures. Instead, positive UK fundamentals strengthened the pound and eclipsed ongoing speculation as to a near-term US Fed taper of its easy money programme.

Asian trading today pushed the price further upwards, with the quote reaching an intraday high so far of 1.6441 – the highest point since 29 August 2011. The northbound travel is supported by price action above the 89- and 200-period simple moving averages on the weekly, daily, 4H and 1H scales. On the same timeframes the MACD (9, 12, 1) is positive, also indicating bullish sentiment.

Markit is shortly to release its UK Manufacturing Purchasing Managers Index for November. Analysts are expecting a rise to 56.3 points from October’s 56.0. The index derives from a survey of some 600 purchasing managers on the relative level of business conditions, including employment, new orders, production, supplier deliveries, prices, and inventories. Levels above 50 indicate industry expansion and below 50 shows contraction.

In the United States today, outgoing Fed chairman Ben Bernanke is scheduled to speak at the National College Fed Challenge, in Washington DC at 13.30 UTC.
Markit’s US November Manufacturing PMI is due at 13.58 UTC, to be followed at 15.00 UTC by the ISM variant, with expectations for a decrease in November to 55.5 points.

Also at 15.00 UTC, US Construction Spending m/m for September and November are set for release. The September data is expected to show a 0.5 percent increase, while the consensus for November is a 0.4 percent rise.
Today’s resistances: 1.6400, 1.6460 and 1.6500.
Today’s supports: 1.6390, 1.6365 and 1.6340.
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