GBP Index & Upside Econ Surprises
In a phase when unwinding of carry trades and risk-repositioning dominate FX markets, beware from excessive divergence from the data. US data continue to deliver its share of mixed showing, but the recent upside surprise from the UK (CPI, retail sales, PMIs and industrial production) cannot be ignored. Their impact is highlighted by the charts below, where the UK surprise index narrows the gap with its US counterpart. Recent GBP losses have partly been triggered by safe haven flows chasing US treasuries and gold, hence dragging down US yields across the board. The result has been further improvement in UK-US yield gap, which in the longer-run provides support for GBPUSD. Looking at GBP from a multi-currency perspective, the Bank of England's trade-weighted index shows GBP remaining supported along a crucial technical foundation. Look out for 1.3060 as the immediate upside target on cable.
Feb 27, 2021 1:00 | by Ashraf LaidiThe prolonged ascent in USDJPY remains fortified by the technical breakdown in net JPY futures longs (inversely related with USDJPY pair) shown in this striking analog from Q4 2016.
Feb 18, 2021 20:52 | by Ashraf LaidiWill the pattern from mid-late Feb 2020 repeat itself today. PROCEED WITH CARE. ..
Feb 2, 2021 19:49 | by Ashraf LaidiEthereum is ready to exceed gold. That is all. ..