INTERNATIONAL CURRENCY BUZZ :
- FOREX – Emerging market currencies drop as China turmoil spreads
- FOREX – Dollar drops to 2-month lows on growth concerns
- FOREX – Yen, euro rally as selloff in China escalates
The bid tone surrounding the GBP/USD pair remains untouched in the European session, as the pound reversed early losses and remains firmer versus the US dollar amid risk-off market profile. The GBP/USD pair trades 0.16% higher at 1.5718, having posted a high at 1.5727 and a low at 1.5631. The cable manages to hold gains amid risk-off sentiments fuelled by China worries while broadly lower US dollar on fading Sept rate hike expectations after the recent dovish FOMC minutes. However, falling oil prices continue to weigh on UK’s mining and energy sector, keeping the upside in GBP/USD restricted. While markets completely shrugged off upbeat growth forecasts by CBI on the UK economy. The UK economy is estimated to rise 2.6% this year, before accelerating further to 2.8% next year, the Confederation of British Industries (CBI) said on Monday. Both figures are higher than its previous estimates.
The unwinding of the carry trades amid risk aversion appears to have failed to push the EUR/USD pair above 1.15 levels for the second time yesterday. An attempt to take out 1.15 failed in the Asian session leading to a 80-pip fall to 1.1420. It was followed by a rebound to 1.15 on the back of a sell-off in the European stocks. However, the spot failed to take out 1.15 once again may be since the major stock markets in the Europe have stabilized around the daily lows. The pair now trades around 1.1470, leading to a double top formation with the neckline at 1.1420 on the intraday technical charts. Another attempt at 1.15 could be seen in case the US equity futures point to a more intense risk aversion on the Wall Street.
- BUY GBP/USD ABOVE 1.5790 TARGET 1.5810 1.5840 SL 1.5760
- SELL GBP/USD BELOW 1.5660 TARGET 1.5640 1.5610 SL 1.5690