GBPUSD is enjoying another push up as price sits above 1.3250, taking us back to levels last seen in January. The 2020 high was 1.3516, fuelled by the general election results.
In terms of raw data, UK inflation was revealed this morning with a modest upside movement. The cost of petrol and the clothing and footwear sector were the biggest contributors to the rise in inflation. Spending habits around protection, such as PPE, physio and private dental treatments have all seen increased demand as well as price increases. For those that missed it, July’s inflation figure stood at 1% versus 0.6% for June.
EURUSD is now knocking on the door of 1.20, which represents a 12.6% increase from the March lows of 1.0641.
1.20 being a round number and historical point of support and resistance is the next logical barrier to break, and with most things in trading or investing, momentum and volume very much rule the roost. Beyond 1.20, EURUSD spent nearly four months in 2018 trading between 1.2542 and 1.2145, so there is significant headroom above to be tested. Looking closely at some of the trading data which is available online and for free, 62% of retail traders are betting on the price of EURUSD to fall. On average 75% of retail traders lose money when speculating on the currency markets, so many institutions take a contrarian view to the general public.
Have a great day.
Author: Alistair Hutson, Senior Relationship Manager
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