GBP/USD analysis: BOE hurt Pound´s demand, employment next

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3540

The UK will release its latest employment figures and the Inflation Hearings report next Tuesday.
GBP suffered after the BOE cut inflation and growth forecasts.

The GBP/USD pair spent the week consolidating at its lowest in 4 months, unable to gather momentum from broad dollar's weakness, as Pound bulls were disappointed by a dovish, on-hold BOE. The central bank kept rates unchanged as expected after the latest batch of soft UK data, but also cut its inflation and growth forecasts for this year and the next, reducing odds of a hike in the second half of the year. The UK will release its latest employment data next Tuesday, the event with most chances of affecting the Pound this week. Wages are expected to have posted a modest advance in the three-month to March, which coupled with easing inflation, will further dent chances of a rate hike in the UK. The kingdom will also release its Inflation Hearing Reports on the same day. In the meantime, the daily chart shows that the pair has been pivoting around the current level with no definitions ever since the week started, which helped technical indicators correct partially extreme oversold conditions, falling short, however, of suggesting a bottom has been placed, as such indicators remain directionless well into negative territory, while the 20 DMA maintains a strong bearish slope far above the current level. In the 4 hours chart, the technical outlook is neutral for the short-term, as the pair keeps hovering around a flat 20 SMA, while technical indicators move back and forth around their mid-lines, failing to provide clear directional clues. The pair fell this past week to 1.3459, making of the level a strong support and the level to break to anticipate a downward extension ahead.

Support levels: 1.3500 1.3460 1.3420

Resistance levels: 1.3590 1.3620 1.3665

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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