GBP/USD Forecast: Likely to defend YTD lows ahead of BoE’s Super Thursday

Haresh Menghani FXStreet

The GBP/USD pair remained under some intense selling pressure on Tuesday and continues to be weighed down by Brexit negotiation impasse. Adding to this, a strong follow-through US Dollar buying, supported by the US President Donald Trump's comments over a possible trade deal with China, further collaborated towards aggravating the selling pressure.

The downward momentum accelerated during the US trading session and dragged the pair momentarily below the 1.2700 handle and back closer to YTD lows, set in mid-August. The bearish pressure now seems to have abated, at least for the time being, with the pair holding steady above the 1.2700 handle through the Asian session on Wednesday.

In absence of any major market moving economic releases from the UK, any incoming Brexit-related news/development might continue to act as an exclusive driver of the sentiment surrounding the British Pound. Later during the early North-American session, the US private sector employment details - ADP report, will influence the USD price dynamics and assist traders to grab some short-term opportunities.

From a technical perspective, near-term oversold conditions on daily/4-hourly chart warrant some consolidation ahead of the BoE's Super Thursday. Hence, the pair seems more likely to defend YTD lows support, around the 1.2665-60 region, at least for the time being, which if broken decisively should pave the way for an extension of the well-established bearish trend.

On the flip side, any attempted recovery moves might now confront immediate resistance near the 1.2765-70 region, above which the pair is likely to aim towards reclaiming the 1.2800 handle before eventually aiming to retest the 1.2840-50 supply zone.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

EUR/USD stays below 1.1850 after dismal German sentiment data

EUR/USD stays in negative territory below 1.1850 in the second half of the day on Tuesday. Renewed US Dollar strength, combined with a softer risk tone keep the pair undermined alongside downbeat German ZEW sentiment readings for February.

GBP/USD falls toward 1.3550, pressured by weak UK jobs report

GBP/USD remains under bearish pressure and extends its decline below 1.3600 on Tuesday. The United Kingdom employment data suggested worsening labor market conditions, bolstering bets for a BoE interest rate cut next month and making it difficult for Pound Sterling to stay resilient against its peers.

Gold recovers modestly, stays deep in red below $4,950

Gold (XAU/USD) stages a rebound but remains deep in negative territory below $4,950 after touching its weakest level in over a week near $4,850 earlier in the day. Renewed US Dollar strength makes it difficult for XAU/USD to gather recovery momentum despite the risk-averse market atmosphere.

Canada CPI expected to show sticky inflation in January, still above BoC’s target

Economists see the headline CPI rising by 2.4% in a year to January, still above the BoC’s target and matching December’s increase. On a monthly basis, prices are expected to rise by 0.1%.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Stellar mixed sentiment caps recovery

Stellar price remains under pressure, trading at $0.170 on Tuesday after failing to close above the key resistance on Sunday. The derivatives metric supports the bearish sentiment, with XLM’s short bets rising among traders and funding rates turning negative.