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- Getting Rid of the Excess Pounds Is Helpful
Getting Rid of the Excess Pounds Is Helpful
The Pound repeatedly bounced off its weekly lows, but its intraday support levels were gradually moving lower. In terms of GBP/USD, today's Cable low is at 1.2088, compared to 1.2132 on Tuesday and 1.2142 on Monday. EUR/GBP is also trying to hold above 0.87 after climbing this hill from a 0.8650 area where it stayed at last week's close. A significant drop of the British currency took place on October 12, which was a response to U.S. inflation data that reignited Fed fund rate hike concerns. A combination of persistent price pressure and a tight labour market lead to increasingly higher U.S. 10-year Treasury bond yields benchmark, which is approaching its 5% record for decades, leading to extra demand for the Greenback.
Parallel to this, the latest data on industrial production from the U.K. showed a 0.7% monthly decline, while analysts predicted only a slight 0.2% shortfall. On Tuesday, October 17, the average earnings (+bonus) index surplus was 8.1% only compared to 8.5% a month ago, supporting the view that the Bank of England may be less hawkish than the U.S. Fed. This supposes a further relative weakness of the GBP and the USD strength.
Getting rid of the excess Pounds is seemingly a wise strategy, with my current trading plans of selling GBP/USD at any upticks towards 1.2170 minor downtrend line, with a possible option of adding more near 1.2200-1.2225 resistance, in case if the Pound will touch that hard-to-reach price zone. A stop loss area could be placed somewhere above 1.2250, as I personally feel it.
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