- Cable continues its multi-week slide despite holiday-thinned trading. The US and the UK markets are closed in observance of Memorial Day and Spring Bank holiday respectively.
- The market is driven by the US Dollar strength and Italian and Spanish political situation which are denting market sentiment.
The GBP/USD bears are winning again on Monday as the pair is revisiting the 2018 low currently trading at around 1.3300 down 0.04% in the data-light session on Monday.
The US Dollar Index (DXY) which measures the greenback relative strength compared with a basket of currencies worldwide is hovering near 5-month highs near the 94.30 as traders have been piling in the USD long trades as they expect the Federal Reserve Bank to hike three times in 2018. Market participants are widely expecting the next rate hike at the June meeting of the Federal Reserve.
Market sentiment is dented by Italian and Spanish political headlines and weighs on GBP.
On the negative side, Sterling is suffering because of market participants' reprisal of probability of the Bank of England hiking rates this year. The BoE is data-dependent and investors will carefully watch inflation and growth indicators in the coming weeks after the last set of macro data fell short of market expectations.
The main highlights of the week will revolve around the US Non-Farm Payroll and wage growth data on Friday and the US Gross Domestic Product (GDP) as well as the core Personal Consumer Expenditure PCE) price index on Wednesday. It is worth noting that the PCE is the favorite gauge of inflation of the Fed.
GBP/USD 4-hour chart
Bears are in control as the market is trading well below its 50, 100 and 200-period simple moving averages on the 4-hour chart. Immediate support is seen at 1.3300 and at the 1.3200 figure while to the upside bulls will likely meet resistance at the 1.3400 handle and at the 1.3492 swing high.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.