GBP/USD Forecast: Pound welcomed UK government’s measures
|GBP/USD Current Price: 1.1873
- UK’s measures against coronavirus crisis getting tougher.
- BOE Monetary Policy Meeting focused on new Governor Bailey.
- GBP/USD changing course, risk now skewed to the upside.
The GBP/USD pair was quite volatile, trading between 1.1638 and 1.1973, this last an over one-week high. The Sterling was backed by risk appetite, also supported by the UK´s decision to change its stance toward the coronavirus, announcing tougher measures, including a lockdown of the country. The pair fell to the mentioned low as the greenback temporarily recovered its poise, amid US equities trading in the red ahead of the opening.
The UK released February inflation data, although the market ignored the figures. Nevertheless, the yearly CPI was up 1.7% as expected. Producer Prices in the same month were down to negative territory, missing the market’s expectations. This Thursday, the Bank of England is scheduled to have a monthly monetary policy meeting. Governor Bailey had already debuted by slashing rates to 0.10% ahead of the meeting, while also expanding the APP to £645B. Chances of further action this time are limited, although given that it is Bailey’s first public appearance, investors will be looking for hints on future policies within his speech.
GBP/USD short-term technical outlook
The GBP/USD pair trades at the upper half of the 1.18 handle near 1.1900 ahead of the close, as the positive momentum of equities is pressuring the greenback. The 4-hour chart shows that it quickly recovered from its daily low, suggesting that buying interest is strengthening. The 20 SMA remains flat below the current level while the 100 and 200 SMA maintain their bearish slopes above the current level. Technical indicators have picked up after some consolidation above their midlines, all of which skews the risk to the upside
Support levels: 1.1690 1.1650 1.1605
Resistance levels: 1.1740 1.1790 1.1830
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