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11 Feb 2014
GBP/USD slightly bid; Yellen takes the seat
FXStreet (Guatemala) - GBP/USD spiked up to 1.6473 the high before meeting conservative supply on the way back to the mid point of the handle. Yellen’s Semiannual Monetary Policy Report to the Congress was published and now she speaks.
The new Fed Chair Janet Yellen said in her first semi-annual testimony on monetary policy and the economic outlook to the US Congress that the situation on the labor market had improved but that the economic recovery still had a long way to go, sending the market mixed signals.
Yellen speech insight:
Steve Ruffley, chief market strategist at InterTrader. Explained that “Yellen will not be able to make any real sweeping statements or flick a switch to fix the fragile state of the US economy. The US economy is like a huge container vessel travelling at speed, set on its course by Captain Bernanke. He has left in the only life raft available and is sipping cocktails in the Soggy Dollar bar with one eye on the horizon. Yellen however, being the new captain, has the unenviable task of deciding what comes next. You can’t just stop QE or ‘drop anchor’ completely at this speed, nor can you just set a totally new course. Yellen in real terms has very little room for manoeuvre metaphorically or economically. What the most concerning part of all is is that she knows it, I know it and so does everyone else in the market. This means that rife speculation and volatility has once again entered the markets. Although Bernake did the best he could under testing conditions, he was less than decisive with his message to the markets on forward guidance (likely under the knowledge that he was due to step down.) Yellen now has to be clear on forward guidance and let the market know in no uncertain terms when QE will end. Only after the FED move on rates will the bond and stock markets be able to efficiently able to price this in, and once again return to trading in ‘normal’ conditions.”
GBP/USD Levels
The 20 DMA is 1.6445, the 50 DMA is 1.6419 and the 200 DMA is 1.5844. RSI (14) reads 59.73. Supports are ascending from 1.6295, 1.6325, 1.6348, 1.6384, 1.6420. Spot is 1.6455 and resistances are 1.6460, 1.6471 and1.6500.
The new Fed Chair Janet Yellen said in her first semi-annual testimony on monetary policy and the economic outlook to the US Congress that the situation on the labor market had improved but that the economic recovery still had a long way to go, sending the market mixed signals.
Yellen speech insight:
Steve Ruffley, chief market strategist at InterTrader. Explained that “Yellen will not be able to make any real sweeping statements or flick a switch to fix the fragile state of the US economy. The US economy is like a huge container vessel travelling at speed, set on its course by Captain Bernanke. He has left in the only life raft available and is sipping cocktails in the Soggy Dollar bar with one eye on the horizon. Yellen however, being the new captain, has the unenviable task of deciding what comes next. You can’t just stop QE or ‘drop anchor’ completely at this speed, nor can you just set a totally new course. Yellen in real terms has very little room for manoeuvre metaphorically or economically. What the most concerning part of all is is that she knows it, I know it and so does everyone else in the market. This means that rife speculation and volatility has once again entered the markets. Although Bernake did the best he could under testing conditions, he was less than decisive with his message to the markets on forward guidance (likely under the knowledge that he was due to step down.) Yellen now has to be clear on forward guidance and let the market know in no uncertain terms when QE will end. Only after the FED move on rates will the bond and stock markets be able to efficiently able to price this in, and once again return to trading in ‘normal’ conditions.”
GBP/USD Levels
The 20 DMA is 1.6445, the 50 DMA is 1.6419 and the 200 DMA is 1.5844. RSI (14) reads 59.73. Supports are ascending from 1.6295, 1.6325, 1.6348, 1.6384, 1.6420. Spot is 1.6455 and resistances are 1.6460, 1.6471 and1.6500.