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30 Sep 2013
GBP/USD spikes near yearly highs as the American dream ‘defaults’
FXstreet.com (Athens) – The GBP/USD has been trading higher since the opening of the Asian’s trading session, mostly due to the fact that US Congress has pushed the world's largest economy to the verge of a government shutdown.
Elaborating on, it might sound a bit peculiar but we are witnessing - to a less or more extent - what we have lived during the summer, fall as of 2011, respectively. Thus, we revive again the political show off drama of the debt-ceiling; in fact, the potential US default on its own debt gathers more pace, as an increasingly partisan of US congress leads seems to be in strongly opposition with lifting the debt-ceiling. Therefore, the US is facing a government shut-down for the first time in 17 years unless a deal on a budget is reached today, while the Italian government is looking incredibly unstable after Berlusconi withdrew his support for the current coalition.
Strategic Bias on the GBP/USD
While political tensions in the United States and Italy - two of the world's largest debt markets - have officially boiled over, the situation in UK seems rather better; Carney said there’s ‘no case for more quantitative easing’ in light of the ‘strengthened, broadened’ recovery, and argued that he does not support the non-standard measure. Traders should in any case bear in mind, that especially after solid UK data seen today, BoE officials may adopt a more hawkish tone for monetary policy committee at the 10th of October, as Mark Carney, Paul Tucker, and Paul Fisher are scheduled to speak in the forthcoming days.
Technical outlook on GBP/USD
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “GBP/USD seems to have found short term support at 1.5954. While a weekly TD perfected set up exists AND the 2009-2013 downtrend at 1.6331 directly overhead caps, the risk remains on the downside.”
Elaborating on, it might sound a bit peculiar but we are witnessing - to a less or more extent - what we have lived during the summer, fall as of 2011, respectively. Thus, we revive again the political show off drama of the debt-ceiling; in fact, the potential US default on its own debt gathers more pace, as an increasingly partisan of US congress leads seems to be in strongly opposition with lifting the debt-ceiling. Therefore, the US is facing a government shut-down for the first time in 17 years unless a deal on a budget is reached today, while the Italian government is looking incredibly unstable after Berlusconi withdrew his support for the current coalition.
Strategic Bias on the GBP/USD
While political tensions in the United States and Italy - two of the world's largest debt markets - have officially boiled over, the situation in UK seems rather better; Carney said there’s ‘no case for more quantitative easing’ in light of the ‘strengthened, broadened’ recovery, and argued that he does not support the non-standard measure. Traders should in any case bear in mind, that especially after solid UK data seen today, BoE officials may adopt a more hawkish tone for monetary policy committee at the 10th of October, as Mark Carney, Paul Tucker, and Paul Fisher are scheduled to speak in the forthcoming days.
Technical outlook on GBP/USD
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “GBP/USD seems to have found short term support at 1.5954. While a weekly TD perfected set up exists AND the 2009-2013 downtrend at 1.6331 directly overhead caps, the risk remains on the downside.”