• GBP/USD awaits the outcome of this week's crucial central bank meetings. 
  • GBP/USD holds above 200 EMA despite firmer US dollar. 

It is a critical week for GBP/USD traders as we have both the Bank of England and the Federal Reserve central bank meetings. At the time of writing, GBP/USD is moving sideways in a consolidated market, hugging a bullish 200 EMA channel, albeit pressured by a firm US dollar as investors survey the conditions of the market's risk profile. 

GBP/USD hit fresh lows on Friday as some investment banks brought forward their forecast for a Bank of England rate rise. The general consensus is that while the BoE's rate-setters could be seen to be on the verge to vote for an early end to their COVID-19 stimulus plans, they are likely to hold off for now.

''Inflation is higher and the labour market tighter than the MPC expected in its August MPR,'' analysts at TD Securities explained.

''While we don't look for a change in policy itself (or even much of a change in the outlook), the MPC (with two new members) will find it hard to ignore these developments. A constructive tone is therefore likely, reinforcing market expectations of a 2022 hike.''

US dollar on firmer grounds ahead of Fed

Meanwhile, the US dollar climbed to three-week peaks on Friday, still benefiting from better-than-expected US Retail Sales data released on Thursday. the data lifted prospects of a hawkish tilt at this week's Fed meeting and it is expected that officials will likely signal that they are almost ready to taper.

''We expect a formal announcement in Dec, not Nov, but will reassess after the meeting,'' the analysts at TD Securities said. 'While median 2022-23 dot-plot projections will likely be unchanged, the math makes any changes more likely to be up than down. Median inflation/growth projections for 2021 will have to be raised/cut.''

GBP/USD technical analysis

 

Overview
Today last price 1.3721
Today Daily Change -0.0020
Today Daily Change % -0.15
Today daily open 1.3741
 
Trends
Daily SMA20 1.3788
Daily SMA50 1.3805
Daily SMA100 1.3912
Daily SMA200 1.3837
 
Levels
Previous Daily High 1.3813
Previous Daily Low 1.3728
Previous Weekly High 1.3913
Previous Weekly Low 1.3728
Previous Monthly High 1.3958
Previous Monthly Low 1.3602
Daily Fibonacci 38.2% 1.376
Daily Fibonacci 61.8% 1.378
Daily Pivot Point S1 1.3708
Daily Pivot Point S2 1.3676
Daily Pivot Point S3 1.3624
Daily Pivot Point R1 1.3793
Daily Pivot Point R2 1.3845
Daily Pivot Point R3 1.3878

 

 

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