Frustrations on both sides of sterling fight
Sterling bulls remain persistent but unsuccessful, having again tested resistance above 1.26 before surrendering and retreating back near 1.2580, but bears are finding no joy either in their attempts to push GBP/USD below 1.25.
This stalemate could leave cable rangebound between its Nov. 22 low at 1.2475 and the falling 10-DMA at 1.2627 heading into the U.S. Thanksgiving Day holiday unless Fed minutes from the Nov. 6-7 meeting due later on Tuesday produce a market-moving surprise.
If not, markets will revert back to comments made by Fed Chair Jerome Powell on Nov. 7, when he indicated the FOMC is in no rush to cut rates. This aligns with current market expectations that foresee only gradual easing from here.
Additionally, a significant amount of U.S. data is set to be released on Wednesday. However, given the proximity to the long holiday weekend and the current political and trade environment, the data, barring a blowout release in either direction, is unlikely to have any lasting effect on sterling.
A break of the 1.25-1.2625 range would probably extend the range to 1.2713, the Nov. 20 high or 1.2475, the Nov. 22 7-month low.
For more click on FXBUZ
GBP Chart: https://tmsnrt.rs/40YXkJc
(Paul Spirgel is a Reuters market analyst. The views expressed are his own)
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