GBPUSD Near Major Resistance Levels

September 9, 2016

GBPUSD

Yesterday the Bank of England announced the Inflation Report, stating that the BoE will implement further QE when it is necessary. The performance of the UK economy after the Brexit vote so far has been a bit better-than-expected. Yet we need more subsequent data to have a clearer picture.

The current price is near the previous high on 14-15 July. 1.3470 is a significant resistance level. The current price action is oscillating in the range between 1.3400 and 1.3300.
The daily Stochastic Oscillator is above 70, suggesting a retracement.

The resistance level is at 1.3370, followed by 1.3400 and 1.3470.
The support line is at 1.3300, followed by 1.3270 and 1.3230.

[gbpusd-d1-2]

The Dollar Index (DXY)

The Fed Beige Book was announced yesterday. It stated that although the labour market is tight and wage level is rising, this was not helping lift inflation. In aggregate, the US economy is expected to grow at a moderate pace in the following months.

DXY has turned bearish since 06th September on the weak ISM figure. The significant support level at 94.73 was broken earlier today, where the medium term trend line support situates. The bearish trend is ongoing. The next support line is at 94.55, followed by 94.35, 94.18 and 94.00.

The price is trading below the 8 and 20 EMAs, suggesting upside selling pressure.

The daily time frame Stochastic Oscillator is below 20, and 4 hourly RSI indicator is around 30, suggesting a rebound.

The newly formed resistance level is at 94.73, followed by 95.00, 95.20 and 95.40.

Keep an eye on the US Initial Jobless Claim and the Continuing Jobless Claims figures, to be released at 12:30 GMT.

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