GBP/USD Weekly Analysis 22 February 2017

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Many USD pairs have been treading water and making not distinct outbreak. Most long-term charts have been showing a neutral path, arising from the first FOMC meeting of 2017. However, with the publication of the FOMC minutes, investors are speculating that this will determine how strong the movement will be.

Earlier, the German Ifo business climate index showed an improvement in Germany’s economic situation, with the index printing out at 111.0, beating the last print of 109.9.

The economic growth report of the UK showed a marginal improvement on the short term, with GDP on a monthly basis rising to 0.7%, while it was anticipated to remain stable at 0.6%. On a yearly basis, the GDP has fallen to 2.0%, where it stood at 2.2% previously. This divergence, according to economist’s opinion is attributed by the Brexit’s long term effects.

The Eurozone’s inflation report showed that inflation has remained unchanged, and at high levels. In the previous monthly session, the CPI printed out at 1.8%, and core CPI to 0.9%.

CHARTING

The crucial points are:

1

The GBP/USD has been in a short-term decline, before market stopped it at the 1.24000 level, where the price has bounced off and has been rising since. However, it appears that the price is continuing  to fluctuate within a range of 1.24000 level of support to 1.25700 level of resistance.

Charting outcome: Neutral    

INDICATORS (computerized T.A)                                                                  

The crucial points are:

2

3

he indicators are not providing a clear message about which direction the trend may follow. The moving averages have almost kept the same slopes, while the spread between the negative and the positive dynamic has tightened. The trend dynamic has marginally fallen by -2.86%, whilst the market’s volatility has fallen by -17.42%. Finally, the oscillators have passed into marginally overbought levels.

Indicators outcome: Neutral – Marginally bearish        

CONCLUSION

Indicators and charting are suggesting that the market is possible to move on a neutral path. If the 1.24000 level of support is breached, the next support is possible to be the 1.22500 level.  On the contrary, if the price appreciates higher than 1.25700 level of support, the next resistance could occur at 1.27300 level.

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