- Monetary policy expectations weighed on GBP.
- GBP/USD keeps moving without a clear direction in the short-term.
The GBP/USD fell on Friday for the fourth day in a row, even despite weaker than expected US data and the slide of the DXY. The pound remains weak amid policy expectations from the Bank of England.
“Comments from Bank of England governor Mark Carney and Silvana Tenreyro suggest that the central bank may have ended their Brexit moratorium and be edging towards a rate cut. If so, this would probably take place at the 7 May meeting”, explained ING analysts. They see jobs data as critical for the central bank. Next week data does not include jobs but inflation (Tuesday) and retail sales (Friday).
Brexit developments offered no surprise at the UK Parliament, having no relevant impact on the pound. According to ING analysts, the Brexit withdrawal agreement is not playing a decisive role in pricing right now. “Instead, news that the BoE is turning a little more dovish, plus no signs of a serious US slow-down, suggests GBP/USD may be spending more time at the lower end of its 1.29-1.35 trading range”.
Technical outlook
The pair shows no clear bias in the weekly chart, closing near 1.3065 for the third week in a row. “It is trading within a narrowing triangle or wedge. Uptrend support is more moderate and began in November. Downtrend resistance is steeper and kicked off at the peak of 1.3510 around the elections. Overall, support is stronger”, explained Yohay Elam, analyst at FXStreet.
According to Elam, the picture is modestly bullish considering GBP/USD is trading above the 50, 100, and 200-day Simple Moving Averages. “Critical support awaits at 1.3010, which capped cable in October and also in January. It is followed by 1.2920, which was a swing low around Christmas.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
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.