GBPUSD news - page 48
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Exit poll sends the GBPUSD surging to the upside
GBPUSD surges 180 pips higher on UK exit pollRight as the old day was turning into the new forex trading day, an exit poll showed that the Tories had 316 seats to Labours 239. It is not a majority but is enough to form a coalition government and remain in control....if correct..
The GBPUSD surged to the upside on the news - rising by 180 or so pips in the process. Is it time to go all in? NOPE. The market may have gapped but there was not much buying likely below the 1.5390 level. You can get a feel for that on the 1 minute chart below.. Traders can get plenty worried if the price does not go to new highs (or trade above the 1.5400 level). No one likes to buy +180 - especially if that level is a resistance level too (see 1.5400 in the hour chart above). There was a liquidation of perhaps some of those buyers down to 1.5358 (38.2% -see 1 minute chart below) but there will still need to be buyers to push higher.
Would I be a chaser? No. I might be more cautious and patient buyer purely on a technical risk defining basis, and look for the 38.2-50% to be an area to lean against (see 1 minute chart below) RISK at the 50%%. Understand, however, that another exit poll that is not so favorable, can shift the tides around.
On the topside the next target comes in at the 1.5480 area. This is near the old highs and near the underside of a broken trend line coming up from April 14.
Don't over leverage. Consider it a traders market, and assume the event risk from a less favorable poll.
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Scottish nationalists crush opponents, setting stage for new indepedence bid
Scottish nationalists rampaged to victory north of the border in Britain's national election, obliterating their opponents and setting the stage for a new battle over independence.
In an epic performance, the Scottish National Party (SNP) ousted the leader of the Labour party in Scotland, defeated a senior Labour figure in Paisley, and took former Prime Minister Gordon Brown's onetime stronghold in Kirkcaldy.
"The Scottish lion has roared this morning across the country," former SNP leader Alex Salmond said after triumphing in the Gordon constituency in Aberdeenshire.
"Scotland has asked to speak with a united voice, that voice will be made clearly for Scotland in the next Westminster parliament," said Salmond, whose campaign to lead Scotland to independence was defeated last September.
But the SNP could still be shut out of any role in the British government, a scenario likely to bring a new confrontation over Scottish aspirations for independence.
Prime Minister David Cameron's Conservatives were on course to win the most seats in parliament with 316, just shy of an outright majority, with Ed Miliband's Labour Party trailing on 239, an exit poll showed. Scotland accounts for 59 seats.
If confirmed, such an outcome would deny the SNP the kingmaker role it had sought in the House of Commons and kill off the prospect of a leftist alliance with Labour to force Cameron out of office.
But it would dramatically highlight the political divide between England and Scotland.
"This is history written as we watch and speak," said Murray Stewart Leith, senior lecturer in politics at the University of West Scotland.
"It has serious implications for the United Kingdom as a political union. Whatever government is formed after this election will need to seriously consider its constitutional structure."
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GBP/USD forecast for the week of May 11, 2015
The GBP/USD pair initially tried to fall during the course of the week, but found enough support to turn things back around. By the time we got towards the end of the week, the market had tested the 1.55 level, an area that we figured would be resistive. It did in fact keep the market down, but just barely. By the time we closed on Friday we had formed a very bullish candle. We believe this bullish candle signifies a market that’s getting ready to break out, although there is a significant amount of noise just above the 1.55 level, extending to the 1.5750 level. It is also the 38.2% Fibonacci retracement level, so there could be a little bit of a push back from the sellers. Ultimately though, this is far too bullish and we think that eventually the buyers will take control again.
The fact that we broke above the top of the shooting star from the previous week, albeit just slightly and temporarily, tells us that there is quite a bit of buying pressure as well. Although this is a longer-term forecasts we would highly encourage you to pay attention to the short-term charts as they may allow entries into what looks to be a longer-term move.
The British elections of course turned out favorably according to the markets, and that not only helped the British pound, but help the FTSE as well. In other words, all things Britain got a bit of a bounce. We have no interest whatsoever in shorting this pair right now, and although the US dollar looks like it’s going to gain strength market wide, this is one of the anomalies in the Forex world right now, as the US dollar looks to be on its back foot in this particular market. We like buying breakouts, we like buying pullbacks and show signs of support, and have absolutely no interest in selling at the moment. This is what a trend changing can look like, extraordinarily volatile and unpredictable at times.
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GBP/USD weekly outlook: May 11 - 15
The pound rallied against the dollar and the euro on Friday after Prime Minister David Cameron’s Conservative Party won a surprise majority in British elections, easing concerns over the prospects of lengthy coalition negotiations.
GBP/USD hit highs of 1.5521, the most since February 26 and ended at 1.5456, up 1.39% for the day.
EUR/GBP hit lows of 0.7226 before finishing at 0.7251, a loss of 1.85% for the day.
Ahead of the elections sentiment on sterling had been hit as opinion polls pointing to a hung parliament fuelled concerns over the likelihood of an unstable coalition government.
In the U.S., the latest employment report showed that job creation rebounded in April, but also included a sharp downward revision to the previous month’s figure.
The Labor Department reported that the U.S. economy added 223,000 jobs in April, just shy of economists forecast for 224,000. The unemployment rate ticked down from 5.5% to 5.4%, the lowest since May 2008.
But March’s payrolls report was revised to show that only 85,000 jobs were created, the fewest since June 2012.
The data did little to alter expectations that the Federal Reserve will keep rates on hold at current record lows until later in the year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, hit highs of 95.17 after the data, before pulling back to 94.9 in late trade. The index ended the week down 0.57%, its fourth consecutive weekly loss.
In the week ahead investors will be turning their attention to U.S. data on retail sales and consumer sentiment for fresh indications on the strength of the economic recovery.
Monday’s monetary policy announcement by the Bank of England and Wednesday’s U.K. inflation report will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
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UK's Cameron in a hurry to get those EU concessions before a referendum
The Sunday Times is today reporting that PM Cameron , fresh from his success on Friday, is to speed up talks in a push to win concessions before the planned referendum promised by the end of 2017
Fin min George Osborne will lead the negotiation team, backed by Foreign Secretary Phillip Hammond with Cameron sending them to Berlin and Brussels as part of a 100-day plan.
The paper also reports that he will prioritise a reform of the country's electoral districts with changes which will give his Conservative Party an extra 20 seats in Parliament, increasing the 331 they currently hold out of 650.
Not the reforms that others outside his party want to see! Shock. Not.
A recent poll on Brexit showed 34% definitely in favour of remaining in the EU, and a further 18% saying they would probably vote to stay in. Another 18% said they definitely wanted to leave and 14% said they would probably vote to exit. With UKIP finding another 4 mln votes this time though we can expect a fierce Out campaign.
On Friday both French President Hollande and EU president Juncker were quick to extend an invitation for talks to Cameron & Co with Juncker saying
"I stand ready to work with you to strike a fair deal for the UK in the EU"
Let's see what kind of "fair deal" that turns out to be
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Bank of England interest rate decision due in London morning - preview
The Bank of England announce their latest interest rate decision at 12pm in London today (11 May 2015), that's 1100GMT.In brief ....
Sterling steady after Bank of England holds
The pound was steady against the dollar on Monday after the Bank of England kept monetary policy on hold at the conclusion of its two-day meeting, ahead of its quarterly inflation report on Wednesday.
GBP/USD was at 1.5474, little changed from around 1.5480 ahead of the announcement.
The BoE said it was keeping the benchmark interest rate unchanged at 0.50%, where it has been since March 2009, in a widely anticipated decision.
The central bank also maintained the stock of asset purchases financed by the issuance of central bank reserves at £375 billion.
The bank did not publish any rate statement, but investors were looking ahead to Wednesday’s quarterly inflation report which would outline its forecasts for growth and inflation.
The announcement was delayed from Thursday because of Britain’s general election.
Sterling rallied to two-month highs on Friday after Prime Minister David Cameron’s Conservative Party won a surprise majority in parliamentary elections, easing concerns over lengthy coalition negotiations.
The pound remained higher against the broadly weaker euro, with EUR/GBP down 0.71% to 0.7379.
The single currency came under pressure ahead of talks between eurogroup finance ministers and Greece later in the day.
Athens is scrambling to reach an agreement on a package of economic reforms in order to access fresh bailout funds.
Ahead of the talks Greece’s government indicated that it was still hopeful that progress would be made but euro zone officials have indicated that too many issues still remain unresolved.
The dollar remained supported after data on Friday showed that the U.S. economy added 223,000 jobs in April, broadly in line with forecasts.
But March’s payrolls report was revised to show that only 85,000 jobs were created, the fewest since June 2012.
The data did little to alter expectations that the Federal Reserve will keep rates on hold at current record lows until later in the year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.35% to 95.23, off last week’s two-month trough of 93.96.
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GBP/USD: Sterling Crashes Through Walls, Highest in 2015
The pound climbed steadily throughout the session versus the US dollar on Monday, adding 200 pips during the session, with additional support stemming after the Bank of England's (BoE) monetary statement brought no changes. The result was expected, leading markets to focus on the UK industrial and manufacturing data on Tuesday, while the BoE's Inflation Report and UK labor market figures are both due out on Wednesday.
The pound soared 0.93% to $1.5585 versus the dollar on Monday, reviving from below the $1.54 handle where it was seen earlier in the day, while the pair breached above its initial resistance at $1.5538 and is now targeting $1.5736.
Looking ahead, UK industrial and manufacturing production are due on Tuesday. "Any significant improvement in this week’s economic data, could well shift expectations about the timing of a move on interest rates," Michael Hewson from CMC Markets said on Monday.
Moreover, Wednesday will bring labor data, with the jobless rate estimated to have dropped further to 5.5% in the quarter to March, while earnings excluding bonuses are expected to have picked up to 2.1%, up from 1.8% a month before.
The BoE Quarterly Inflation Report, which will include an updated outlook for inflation, growth and the labor market, is likely to point to the diminishing threat of deflation in the UK from the third quarter this year onward.
February projections, based on market interest rate expectations, showed CPI inflation picking up to 1.2% in the first quarter of 2016, before crawling slowly up to hit the 2% target at the start of 2017.
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Preview: UK Factory Output to Remain Steady at Q1 End
Growth in UK industrial production, which includes extraction of oil and gas from the North Sea, is estimated to have remained flat between February and March, down from a mere rise of 0.1% a month before. Output in factories is expected to have slowed to an increase of 0.3% in March, which would be slower than a 0.4% rise a month before.
The Office for National Statistics (ONS) is releasing March figures on Tuesday morning.
The data release on Tuesday will also include updated quarterly figures. According to the first GDP estimate, published at the time when statisticians worked with figures from only the first two months of the first quarter, showed a decline of 0.1% in industrial production, and a 0.1% increase in the manufacturing sector.
The first official estimate of the UK GDP showed the overall economic performance slowed by half at the start of the year to 0.3%. Economists argue pre-election uncertainty might have led to subdued orders and output in both the manufacturing and construction sectors, while official statisticians warned "against reading too much into one quarter's figures." The first GDP estimate is usually based on less than 50% of data available and includes only the output measures of GDP, so revisions are expected.
Despite a sudden dip in the first quarter, the latest NIESR forecast suggests the UK economy should maintain momentum throughout this year, growing 2.5% in 2015 and 2.4% in 2016. On BoE monetary policy expectations, NIESR said that "despite weak price growth this year, we expect monetary policy to begin tightening in the first quarter of 2016 as temporary oil price and exchange rate effects dissipate."
Markit's Purchasing Managers' Index (PMI) showed an improvement in the UK factories' business activity in March as the headline PMI measure rose to an eight-month high of 54.4, only to slide down to a seven-month low of 51.9 in April.
Commenting on the March data, Markit's senior economist Rob Dobson said, "The sector was on course for output growth ranging around 0.6% over the opening quarter as a whole, a positive contribution to broader economic expansion and its best performance since the first half of last year."
According to the Confederation of British Industries (CBI), the manufacturing sector rose above the long-term average in the first quarter, while sluggish exports continued to hamper its full potential.
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March 2015 UK industrial production 0.5% vs 0.0% exp m/m
UK industrial and manufacturing production 12 May 2015