GBP/USD in consolidation-mode between 1.3735-1.3900 – UOB

Pablo Piovano FXStreet

Cable is forecast to extend the rangebound theme in the next weeks, likely within the 1.3735-1.3900 range, noted UOB Group’s FX Strategists.

Key Quotes

24-hour view: “While we noted yesterday that ‘downward momentum has not improved by all that much’, we were of the view that GBP ‘could edge lower to1.3775’. Our view was incorrect as GBP rebounded strongly to 1.3890. The rapid bounce appears to be running ahead of itself and GBP is unlikely to strengthen much further. For today, GBP is more likely to consolidate and trade between 1.3820 and 1.3900.”

Next 1-3 weeks: “After GBP fell sharply to 1.3800, we indicated yesterday (14 Jul, spot at 1.3805) that ‘shorter-term downward momentum has improved somewhat but it is too early to expect the start of a sustained decline’ and we expected GBP to ‘trade between 1.3735 and 1.3900 for a period of time’. There is no change in our view for now even though we did not quite anticipate the subsequent rapid rebound to an overnight high of 1.3890. Looking ahead, a breach of 1.3900 is not ruled out but GBP has to close above 1.3930 before a sustained advance can be expected.”

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD accelerates losses, focus is on 1.1800

EUR/USD’s selling pressure is gathering pace now, opening the door to a potential test of the key 1.1800 region sooner rather than later. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and the publication of the FOMC Minutes later in the day.

GBP/USD turns negative near 1.3540

GBP/USD reverses its initial upside momentum and is now adding to previous declines, revisiting at the same time the 1.3540 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold picks pace, flirts with $5,000

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and pushing higher towards the key $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Fed Minutes to shed light on January hold decision amid hawkish rate outlook

The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.