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Sterling Trades Higher After BoE Comments, Weak Dollar

by on November 22, 2013 9:24 am GMT
 

The Sterling traders through 1.62 per dollar and set for another weekly gain against the dollar, currently down .20 percent. The Bank of England’s policy maker Spencer Dale reassured the markets that rates will remain low until the United Kingdom shows more sustainable growth.

Spencer said the United Kingdom would need “number of years of strong sustained growth until the economy starts to feel normal again,” which sounds much like the policy of the Federal Reserve chairman Ben Bernanke.

The Sterling has gained just under seven percent within the last six months opposed to the 1.4 percent decline in the dollar.

GBPUSD is moving higher, currently trading at 1.6212. The daily chart shows price action with the potential of retesting the top of 1.6259.  Support will be located at 1.6150 and 1.6065.

The trend strength is modest but beginning to tick upwards as the dollar begins to weaken once again. A break of the yearly high could help move the GBPUSD to 1.6300.

11/22/13

1D Chart of GBPUSD

The dollar index fell after reported positive data yesterday. Price action bounced off the 200 EMA and began to head lower. This area has been a hard obstacle to overcome. The dollar will find further support at 80.72 and 80.56.