Earlier today, the U.S. currency rose against most major currencies as expectations that the Federal Reserve will continue to scale back its stimulus program this week fueled demand for the greenback. What impact did these moves have on major currency pairs?
Against the U.S. dollar the British pound is back to its strongest in almost three years. Against the single European currency unit, which incidentally is more than holding its own vs. the dollar, the pound is back up to its strongest in a year.
Canada is a major producer and exporter of natural resources, which means its currency is closely tied to the fortunes of commodity prices. With signs that the commodity super-cycle is fading, it is likely that CAD will notch up further losses over the course of 2014.
The British pound found some resistance against the dollar recently around the 1.6600 figure, which is where we think the pair will form a top even if just temporary. Our primary count suggests that GBP/USD will fall in impulsive fashion.
The British pound has been favored against many of the world’s other biggest currencies, and the Australian dollar of course has been no different. After all, the Australian dollar has been absolutely pummeled against the U.S. dollar.
The British pound is at the highs against the U.S. dollar, now above the wave the trendline connected from 2009 highs but still below 1.6744, which is a triangle invalidation level from a weekly chart.