GBP/USD analysis: Carney's 180 degree turn on rates fuels Pound

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2930

The Sterling soared to as high as 1.2971 against the greenback, its highest since June 8th, as BOE's Carney surprised market players with a 180 degree turn on monetary policy. Carney said that an interest rate hike will be "necessary" if the global recovery continues, leading to stronger wage growth. Additionally, he said that the global recovery was becoming "broad-based" and that "some removal of monetary stimulus is likely to become necessary if the trade-off facing the MPC continues to lessen and the policy decision accordingly becomes more conventional." The pair retreated from the mentioned high but stabilized above the 1.2900 level. Brexit headlines have been out of focus for nearly a week, but can return to hit Pound any time, although now that PM May got support from the DUP, negative news are not expected short term. In the meantime, the 4 hours chart shows that the 20 SMA has extended its advance below the current level, now nearing the 200 EMA and with technical indicators having turned flat within extreme overbought levels, supporting some consolidation ahead, before the next directional move. Early June high of 1.2977 is the immediate resistance, with a stronger one in the 1.3050 price zone, from where the pair retreated late May.

Support levels: 1.2760 1.2720 1.2670

Resistance levels: 1.2820 1.2855 1.2900

View Live Chart for the GBP/USD

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.

EUR/USD remains depressed below mid-1.1800s; downside potential seems limited

The EUR/USD pair attracts some sellers for the second consecutive day on Tuesday and hovers below mid-1.1800s amid a relatively quiet trading action during the Asian session. The broader fundamental backdrop, however, warrants some caution for bearish traders before positioning for deeper losses.

GBP/USD trades with negative bias, eyes 1.3600 ahead of UK jobs data

The GBP/USD pair trades with a negative bias for the second straight day, though it lacks bearish conviction and holds above the 1.3600 mark through the Asian session on Tuesday. Traders now look forward to the release of the UK monthly jobs report, which will influence the British Pound and provide some impetus to the currency pair.

Gold declines as trading volumes remain subdued due to holidays in China

Gold price extends its losses for the second successive session, trading around $4,930 per troy ounce during the Asian hours on Tuesday. Gold price is trading nearly 0.7% lower at the time of writing as trading volumes stayed thin due to market holidays across China, Hong Kong, and other parts of Asia.

Top Crypto Gainers: Stable, MemeCore and Nexo rally test critical resistance levels

Stable, MemeCore, and Nexo are among the leading gainers in the crypto market over the last 24 hours, while Bitcoin remains below $70,000, suggesting renewed interest in altcoins among investors.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.