Pound Sterling Price News and Forecast: GBP/USD weak UK economic data add to cable's negative outlook
|GBP/USD Forecast: Pound Sterling recovery attempts to remain as technical corrections
GBP/USD closed the second consecutive day in negative territory on Thursday and extended its slide to the 1.2250 area early Friday. The pair's near-term technical outlook highlights oversold conditions but a convincing recovery could be hard to come by.
The Bank of England went against the market expectation of a 25 basis points rate hike and left the interest rate unchanged at 5.25% in a split vote. A majority of the Monetary Policy Committee cited the loosening labor market, soft August inflation data and falling business sentiment as validation to hold the rate steady, the BoE's policy statement showed. Read more...
GBP/USD outlook: Weak UK economic data add to cable's negative outlook
Bears tightened grip on Friday, offsetting initial positive signal of Thursday’s long-tailed daily candle, formed on post-BoE dip and subsequent bounce.Fresh weakness is pressuring six-month low (1.2231) and nearby 55WMA (1.2204) which produced headwinds on Thursday, on track to break these supports and extend larger bear-leg from 1.3141 (2023 high) towards targets at 1.2074/00 (Fibo 38.2% of 1.0348/1.3141 uptrend / psychological).
Increasingly bearish technical picture on daily chart points to negative near-term outlook, with downside pressure being boosted by weaker than expected UK Aug retail sales and drop of UK services PMI well below forecast, which blows expectations of those advocating further BoE rate hikes.
Pound Sterling retreats as UK economy exposes to slowdown
The Pound Sterling (GBP) finds offers while attempting to extend recovery as investors see no change in the current policy divergence between the Federal Reserve and the Bank of England (BoE). The GBP/USD pair looks set to test its six-month low as BoE policymakers have shifted their focus to safeguarding the economy from recession risks.
The UK economy has been through a vulnerable phase as the BoE was consistently raising interest rates so that inflationary pressure above the desired rate could recede. While the BoE still cannot announce a victory over inflation as it is more than three times the desired rate, the UK’s economic outlook has worsened as firms are operating on lower capacity and labor growth has slowed. Read more...
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