GBP/USD Forecast: BOE’s Governor Bailey hit the pound

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3895

The EU launched legal action against the UK for breaching the Northern Ireland protocol.
BOE’s Governor Andrew Bailey said that the central bank is committed to buying bonds.
GBP/USD has bounced sharply from around 1.3800, but the bullish potential is limited.

The GBP/USD pair traded as low as 1.3808 during London trading hours, but a weaker dollar helped GBP/USD trim intraday losses and settle near the 1.3900 figure. The pound was hit by news that the European Union launched legal action against the UK for breaching the Northern Ireland protocol.

Additionally, Bank of England Governor Andrew Bailey said that the central bank is committed to buying bonds at an elevated pace, sounding cautious about the economic recovery. His words are relevant ahead of the BOE’s monetary policy meeting that will take place next Thursday. The UK macroeconomic calendar will remain empty until then.

GBP/USD short-term technical outlook

The GBP/USD pair is just below a daily high of 1.3905 with limited bullish potential. In the 4-hour chart, the pair is back below a directionless 200 SMA, but below the shorter ones, with the 20 SMA gaining bearish strength. The Momentum indicator recovered from near oversold readings but hovers around its midline, while the RSI indicator stabilized around 48.

Support levels: 1.3865 1.3820 1.3770

Resistance levels: 1.3945 1.3990 1.4030

View Live Chart for the GBP/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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 treads water around 1.1900

EUR/USD edges a tad lower around the 1.1900 area, coming under mild pressure despite the US Dollar keeps the offered stance on turnaround Tuesday. On the US data front, December Retail Sales fell short of expectations, while the ADP four week average printed at 6.5K.

GBP/USD looks weak near 1.3670

GBP/USD trades on the back foot around the 1.3670 region on Tuesday. Cable’s modest retracement also comes in tandem with the decent decline in the Greenback. Moving forward, the US NFP and CPI data in combination with key UK releases should kee the quid under scrutiny in the next few days.

Gold the battle of wills continues with bulls not ready to give up

Gold comes under marked selling pressure on Tuesday, giving back part of its recent two day advance and threatening to challenge the key $5,000 mark per troy ounce. The yellow metal’s correction follows a better tone in the risk complex, a lower Greenback and shrinking US Treasuty yields.

AI Crypto Update: BankrCoin, Pippin surge as sector market cap steadies above $12B

The Artificial Intelligence (AI) segment is largely on the back foot with major coins such as Bittensor (TAO) and Internet Computer (ICP) extending losses amid a sticky risk-off sentiment.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

XRP holds $1.40 amid ETF inflows and stable derivatives market

Ripple trades under pressure, with immediate support at $1.40 holding at the time of writing on Tuesday. A recovery attempt from last week’s sell-off to $1.12 stalled at $1.54 on Friday, leading to limited price action between the current support and the resistance.