GBP/USD Forecast: Under pressure to slide towards 1.3750

GBP/USD is trapped in the downward sloping trend as BoE´s rate hike willingness eases and the US Treasury yields rise above the key psychological level of 3.0%
Technically GBP/USD target 1.3750, representing 38.2% Fibonacci retracement of a big move from 1.3700 to 1.4377.

Mario Blascak, PhD Independent Analyst

The GBP/USD is trading below the key support line of 1.3970 and with the US benchmark Treasury yields finally settling above 3.0% psychological mark the currency pair is set to fall further towards 1.3900-1.3800 before facing another technical hurdle of 1.3750.

There are no major macro data scheduled for the UK or the US on Wednesday so the market sentiment is likely to be driven by the moves of the US Treasury yields that support the US Dollar broadly.

On the political front, the UK Prime Minister Theresa May is facing increased pressure from the House of Lords and House of Commons that prefer the UK to stay within the customs union with EU after Brexit. Such stance is not acceptable for the Tory Party hardlines that consider the absolute separation from the EU the primary goal of Brexit.

The situations remind me the famous duet of Freddie Mercury and David Bowie singing Under Pressure:

Pressure pushing down on May
Pressing down on her no Brexiteer asks for
Under pressure... that burns a building down
Splits a Tory Party in two
Puts people on streets
It's the terror of knowing
What this world is about
Watching some good friends
Screaming `let me out'
Pray tomorrow... gets me higher
Pressure on people... people on streets…

GBP/USD 1-hour chart

Author

Mario Blascak, PhD

Independent Analyst

Dr. Mário Bla&scaron;čák worked in professional finance and banking for 15 years before moving to journalism. While working for Austrian and German banks, he specialized in covering markets and macroeconomics.

EUR/USD holds lower ground near 1.1850 ahead of EU/ US data

EUR/USD remains in the negative territory for the fourth successive session, trading around 1.1850 in European trading on Friday. A broadly cautious market environment paired with modest US Dollar demand undermines the pair ahead of the Eurozone GDP second estimate and the critical US CPI data.

GBP/USD keeps losses around 1.3600, awaits US CPI for fresh impetus

GBP/USD holds moderate losses at around 1.3600 in the European session on Friday, though it lacks bearish conviction. The US Dollar remains supported amid softer risk tone and ahead of the US consumer inflation figures due later in the NA session on Friday.

Gold trims intraday gains to $5,000 as US inflation data loom

Gold retreats from the vicinity of the $5,000 psychological mark, though sticks to its modest intraday gains heading into the European session. Traders now look forward to the release of the US consumer inflation figures for more cues about the Fed policy path. The outlook will play a key role in influencing the near-term US Dollar price dynamics and provide some meaningful impetus to the non-yielding bullion.

US CPI data set to show modest inflation cooling as markets price in a more hawkish Fed

The US Bureau of Labor Statistics will publish January’s Consumer Price Index data on Friday, delayed by the brief and partial United States government shutdown. The report is expected to show that inflationary pressures eased modestly but also remained above the Federal Reserve’s 2% target.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Solana Price Forecast: Mixed market sentiment caps recovery

Solana (SOL) is trading at $79 as of Friday, following a correction of over 9% so far this week. On-chain and derivatives data indicates mixed sentiment among traders, further limiting the chances of a price recovery.