GBP/USD: BoE expectations weighing as DXY finds space on 91 handle
|- GBP/USD: weighed by continued strength in the greenback.
- GBP/USD: BoE rate hike probability for May now a coin toss.
GBP/USD continues to suffer on dovish shift in BoE expectations on Carney and made a fresh low of 1.3917 in Tokyo yesterday where the pair is recovering from today. Currently, GBP/USD is trading at 1.3981, up 0.29% on the day, having posted a daily high at 1.3989 and low at 1.3918.
GBP/USD dropped the vicinity of the 1.42 handle when Carney was interviewed on April 19th that left the market scaling back expectation of a BoE rate hike on the 10th May. It had been a 70/30 projection of a rate hike probability before Carney talked down the economy and it is now a coin toss as to whether the BoE will hike in May.
At the same time, US yields have been testing the 3.00% mark in the 10 years and the greenback has been ploughing through the 89 and 90 handle to as high as 91.07 scored earlier today.
How far can the dollar go?
"We could see the USD remain at these elevated levels for around three-four weeks - before the next wave of weakness kicks in. But given the high degree of uncertainty around US trade and foreign policy, we're aware that we may be only one tweet away from this coming much sooner," analysts at ING Bank argued.
GBP/USD levels
The price keeps breaking down barriers and the next key hurdle for the bears will be the four-month uptrend line at 1.3844. The bearish picture will reverse with a score and hold above the 200-W SMA 1.4233 with closes above the recent high if there is going to be a run towards 1.5022 on the very wide.
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