GBP/USD Outperforms as BoE Dove Endorses Wait-and-See Approach

Talking Points:

- GBP/USD Outperforms as BoE’s Haldane Endorses Wait-and-See Approach.

- AUD/USD Presses Fresh Weekly Highs Ahead of Australia Employment Report.

- USDOLLAR Pullback to Unwind on Hawkish Fed Rhetoric.

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GBP/USD

Chart - Created Using FXCM Marketscope 2.0

• Despite the lackluster U.K. Jobless Claims report, GBP/USD outperforms against its major counterparts, with former support around 1.5250 (50% retracement) in focus; longer-term outlook remains tilted to the downside as the Relative Strength Index (RSI) largely retains the bearish formation from back in May.
• With Bank of England (BoE) board member Andrew Haldane talking down bets for additional monetary support, the sterling may trade on a firmer footing against its non-USD crosses as the central bank remains on course to normalize monetary policy.
• DailyFX Speculative Sentiment Index (SSI) shows the retail crowd remains net-long GBP/USD since August 21, but the ratio continues to come off of recent extremes as it narrows to +1.72, with 63% of traders long.

AUD/USD

• With Australia’s Employment report expected to show a 15.0K rebound in job growth, a positive development may spark a larger rebound in AUD/USD as the pair pushes to a fresh weekly high of 0.7077; need a break of the bearish RSI formation to favor a larger rebound in the exchange rate.
• However, a further deterioration in the labor participation rate accompanied by a decline in full-time positions may put increased pressure on the RBA to further embark on its easing cycle amid the weakening outlook for global growth.
• Will keep a close on the monthly opening range amid the failure to close back above 0.7180 (61.8% retracement), but the longer-term outlook remains tilted to the downside amid the deviating paths for monetary policy, with the next region of interest coming in around 0.6950 (161.8% expansion) to 0.6970 (50% expansion).

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USDOLLAR(Ticker: USDollar):

Chart - Created Using FXCM Marketscope 2.0

• Dow Jones-FXCM U.S. Dollar may continue to consolidate over the next 24-hours of trade amid the holiday trade, while market attention turns to key speeches from Fed Chair Janet Yellen, Vice-Chair Stanley Fischer, Governor Daniel Tarullo, San Francisco Fed President John Williams, Boston Fed President Eric Rosengren, St. Louis Fed President James Bullard, Richmond Fed President Jeffrey Lacker, Chicago Fed President Charles Evans, New York Fed President William Dudley and Cleveland Fed President Loretta Mester.
• With Fed Funds Futures pricing a 68% probability for a rate hike at the December 16 interest rate decision, signs of a growing dissent within the committee may boost the appeal of the greenback as Chair Janet Yellen and Co. remains upbeat on the economy.
• Topside targets around 12,273 (161.8% expansion) to 12.296 (100% expansion) remain in focus as the USDOLLAR holds above former resistance around 12,162 (April high) to 12,176 (78.6% expansion).

Read More:

AUD/JPY Flirting with Pivotal Support

COT - Silver Over Owned

USD/JPY Technical Analysis: A Hold Above Support Favors Liftoff

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

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