GBP/USD tests 1.34 on Carney's remarks

Eren Sengezer FXStreet

The GBP/USD pair, which started the day a couple of pips above the 1.32 handle, added 200 pips on Thursday on its way to a fresh yearly peak at 1.3405. As of writing, the pair was trading at 1.3392, adding 1.4% on the day.

Earlier in the day, the Bank of England decided to leave the rates unchanged with a 7-2 vote. The minutes showed that the bank was now seeing it appropriate to withdraw some stimulus in the coming months. Although there was no press conference today, the BoE Governor Mark Carney commented on their decision in an interview, saying that in order to return inflation to the 2% target rate in a sustainable manner, they may need to do some adjustments in interest rates in coming months.

The GBP is also gathering strength against the euro, suggesting that the cable's upsurge is a product of the GBP strength rather than a USD weakness. In fact, the US Dollar Index, which spiked to a fresh weekly high at 92.66 on the back of higher-than-expected consumer inflation growth in the U.S., is flat on the day at 92.35.

Despite today's upsurge, Viraj Patel, Foreign Exchange Strategist at ING, argues, "a 'withdrawal of stimulus' may only offer GBP a one-time boost, with the narrative quickly shifting back to Brexit over the coming weeks."

GBP: BoE’s job pretty much done, now back to Brexit - ING

Technical outlook

The RSI indicator on the daily graph rose to 73, showing overbought conditions for the pair. 1.3300 (psychological level) could be seen as the first target in case a technical correction starts. Below that level, 1.3190 (Sep. 13 low) and 1.3100 (psychological level/Sep. 8 low) could act as technical supports. On the upside, a daily close above the 1.3400 (daily high) could open the door for further gains towards 1.3500 (psychological level) and 1.3535 (Jun. 29 high).

Today's data from the U.S.:

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD tests nine-day EMA support near 1.1850

EUR/USD inches lower during the Asian hours on Monday, trading around 1.1870 at the time of writing. The 14-day Relative Strength Index momentum indicator at 56 stays above the midline, confirming improving momentum. RSI has cooled from prior overbought readings but stabilizes above 50, suggesting dips could stay limited before buyers reassert control.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold slides below $5,000 amid USD uptick and positive risk tone; downside seems limited

Gold attracts fresh sellers at the start of a new week and reverses a part of Friday's strong move up of over $150 from sub-$4,900 levels. The commodity slides back below the $5,000 psychological mark during the Asian session, though the downside potential seems limited amid a combination of supporting factors.

Bitcoin, Ethereum and Ripple consolidate within key ranges as selling pressure eases

Bitcoin and Ethereum prices have been trading sideways within key ranges following the massive correction. Meanwhile, XRP recovers slightly, breaking above the key resistance zone. The top three cryptocurrencies hint at a potential short-term recovery, with momentum indicators showing fading bearish signs.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.