GBP/USD Weekly Analysis 16 February 2017

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Janet Yellen’s testimony provided us information about the outlook for the FOMC’s monetary policy and interest rate hikes. Regarding President Trump’s fiscal policy, she was quoted as saying the following:

‘’Changes in fiscal policy or other economic policies could potentially affect the economic outlook. Of course, it is too early to know what policy changes will be put in place or how their economic effects will unfold. While it is not my intention to opine on specific tax or spending proposals, I would point to the importance of improving the pace of longer-run economic growth and raising American living standards with policies aimed at improving productivity. I would also hope that fiscal policy changes will be consistent with putting U.S. fiscal accounts on a sustainable trajectory.’’

Quote from: https://www.federalreserve.gov/newsevents/testimony/yellen20170214a.htm

The labour market report from UK showed a falling of claimant count by -42.4K, which is double from previously -20.5K. However, the unemployment rate has remained stable at 4.8%, while the average earnings index +Bonus showed a slight fall in the average wages from previous recordings at 2.6% from 2.8%. The results indicate that unemployment is dropping as are salaries.

 

CHARTING

The crucial points are:

1

In the previous sessions, the GBP/USD has been marginally dominated by the bears. However, observing the spikes being drawn this indicates that the bears have not gained total control of the market. The price today is testing the 1.24100 level of support. Charting outcome: Marginally Bearish – Neutral  

INDICATORS (computerized T.A)                                                                  

The crucial points are:

2

 

3

The indicators are not providing a clear message about which direction the trend may follow. The moving averages have kept the same slopes, while the spread between the negative and the positive dynamic has widened. The trend dynamic has marginally decreased by -3.69%, whilst the market’s volatility has decreased by -10.81%. Finally, the oscillators have passed into marginally oversold areas.

Indicators outcome: Neutral – Marginally bearish        

CONCLUSION

Indicators and charting are suggesting that the market is possible to move on a neutral or marginally bearish path. If the price bounces off at 1.24100 level of support, the next resistance could occur at 1.26500 level. On the contrary, if the 1.24100 level of support is breached, the next support is possible to be the 1.22100 level.

 

 

 

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