GBP/USD: up, up and away through the 1.30 handle
GBP/USD is trading at 1.3037, up 0.79% on the day, having posted a daily high at 1.3044 and low at 1.2909.
GBP/USD was better bid on the day despite poor data from the UK economy that shows after a poor H1, the economy still is not improving.
The UK Markit services PMI for August arrived in at 53.2, and below the 53.8 prior.
However, the main focus remained with the US dollar and whether or not the N.Korean situation will escalate to a war, dovish Fed talk and calculating the damages to the US economy from the storms.
- U.S. to continue deployment of defense assets to Korea - Yonhap
- Markets no longer view another hike in 2017 as likely - BBH
- US Factory Orders: Soft reading but steady improvement in business spending - Wells Fargo
- Florida and Puerto Rico declared state of emergency due to Hurricane Irma
- Fed's Kashkari: Fed's rate hikes may be causing ‘real harm’ to US economy
Fed's Kashkari said that the Fed's rate hikes may be causing ‘real harm’ to US economy, Florida and Puerto Rico have declared a state of emergency due to Hurricane Irma and in respect to N.Korea, "a top U.S. naval commander said Tuesday his country will keep sending formidable defense assets to the Korean Peninsula in combined deterrence and response to North Korea's "self-destructive" actions," Korean News Agency Yonhap reported on Tuesday.
GBP/USD levels
"Trend signals are positive in the short-term studies but daily signals remain flat," noted analysts at Scotiabank who look for more range trading in the short run.
Valeria Bednarik, chief analyst at FXStreeet explained that from a technical point of view, the price is currently struggling around the 50% retracement of the August decline, after reaching a daily high of 1.3031, pointing to correct lower as in the 4 hours chart.
"Technical indicators are retreating from overbought levels, although the RSI indicator remains above 60, limiting the downward scope. In the same chart, the 20 SMA is advancing modestly above the 200 EMA, both in the 1.2940/50 region. It would take a break below this last to deny a new leg higher for this Wednesday. To the upside, the next big resistance comes at 1.3080, the 61.8% retracement of the same slide," - Valeria explained further.