GBP/USD Daily Signals – December 22, 2017

Sterling holds the support

President Donald Trump said House Democrats were looking for abandon to seek attention apart from the tax bill which he is expected to sign soon as the House nearing a vote on a stopgap budget to keep the government open for the next month. The House is expected to vote late Thursday on a bill to fund the government through Jan.19.

Among the year-end rebalancing and mixed US data, the equities and bond yields increased overnight and the US dollar remained down casted.

The US 10 year treasury yields remained exalted between 2.48% and 2.50% the latter a nine-month high, while 2 year yields initially increased further to 1.87% a nine year high. The Fed fund yields gradually declined pricing the chance of another rate hike in March at 52%.

Following the 10-year Treasury yield approached 2.50%, the moderate bond-buying promoted long-term yields down as overseas investors looked to buy debt at more attractive prices.

On Thursday, the U.S. stocks closed higher with energy stocks helping major indexes to end points away from record territory. The latest economic report pointed out to gradual slowing from strong previous analysis further supported the market.

Under the government’s final version to gross domestic product, the U.S. economy’s pace of development in the third quarter was gradually declined from 3.3% annual rate to 3.2%. The economists were anticipating GBP to be unchanged and in the second quarter the economy expanded at a 3.1% rate.

Technically, on four hourly charts, the GBP/USD pair has found a good support base. The pair is located at the 1.3335 level and continues to climb higher heading for a retest of 1.3370 levels. A retest breaking here should look forward at the 1.3391 level. Its next target at the resistance lies at the 1.3426 levels. The oscillator trading at the 73.00 level is rising inches higher supporting the case for a rebound looking for consolidation pattern from the 1.3370 levels. The pair is still in progress with a strong support base holding the levels. The pair’s price action indicates a shift in momentum to an upside bias with pair closing above the break of trend line. The pair looks for the corrective upward bias with price action confirming the bullish movement medium term rally is still in progress from the support area of market to upward momentum. The pair looks stronger with the sustained trading above the 1.3370 level confirming a strong long term momentum. This will remain the favored case as long as support holds and would pave the way to reach level at the 1.3391 level.


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