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COZfx: GBP/USD trims gains after strong US data

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COZfx: GBP/USD trims gains after strong US data

Postby dwang » Fri Aug 29, 2014 2:24 am

COZforex: The pound trimmed gains against the US dollar on Thursday, reproaching recently hit 5 month lows as demand for the greenback found broad support after upbeat US economic reports.

GBP/USD pulled away from 1.6614, the pair's highest since August 20, to hit 1.6576 during U.S. morning trade, still up 0.01%. COZFX strategist Nigel Boynton said, GBP/USD is predicted to find support at 1.6554, and a drop through could take it to the next support line of 1.6516. Meanwhile, the pair is predicted to find its first resistance at 1.6618, and a rise through could take it to the next resistance line of 1.6644.

The dollar found support after preliminary data showed that US gross domestic product expanded by 4.2% in the second quarter, beating expectations for growth of 3.9%, after an expansion of 4.0% in the 3 months to April.

In addition, the US Department of Labor said the number of individuals filing for initial jobless benefits in the week ending August 22 declined by 1,000 to 298,000 from the previous week’s revised total of 299,000. Analysts had expected the number of individuals filing for initial jobless benefits to rise by 1,000 to 300,000 last week.

The strong data confirmed Federal Reserve Chair Janet Yellen's comments at Jackson Hole last week saying that the US economy is recovering and the labor market is improving.

A separate report showed that US pending home sales increased by 3.3% last month, compared to expectations for a 0.5% rise. June's figure was revised to a 1.3% drop from a previously estimated drop of 1.1%.

In the UK, the Confederation of British Industry earlier reported that realized sales rose to a six-month high of 37 this month, from a reading of 21 in July, compared to expectations for a rise to 27.

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