• The British pound falls to monthly lows, trades around 1.3655.
  • The market-mood is in risk-off mode, weighed by Chinese real-estate Evergrande and broad-based US dollar strength.
  • Central banks of both countries, to hold its monetary policy meetings, on this week.

GBP/USD is declining for the third day in a row, down 0.61%, trading at 1.3657 at the time of writing.

The market sentiment remains downbeat as Chinese real estate developer Evergrande scrambles to fulfill its bond interest payments due this week, triggering a global sell-off of everything that has the “risk” word attached to it. Additionally, the possibility of a Federal Reserve announcement of reducing its bond asset purchases this week also weighed.

Meanwhile, the US Dollar Index, which measures the buck’s performance against a basket of six currencies, is flat, sitting at 93.24.

Central banks of both countries will hold their monetary policy meetings, this week

In the US, the Federal Reserve will meet on September 21-22 to discuss monetary policy. On Wednesday will release its Summary of Economic Projections and the monetary policy statement, expected to keep the interest rates unchanged. The highlight of the meeting will be the QE’s reduction. If there is some sort of announcement on the statement, it could be positive on the US dollar, negative for the British pound, as most investors expect the Fed to reveal its bond taper intentions in the November meeting. 

Meanwhile, in the UK, the Bank of England will meet on September 23. In the last meeting, Michael Saunders voted to finish the bank’s bond purchasing program, but most MPC members kept the pace unchanged.

Concerning a raise of interest rates, the BoE’s Governor Andrew Bailey commented that four out of eight MPC members thought some initial conditions had been met to raise rates to explore the possibility of raising interest rates. Nevertheless, this seems remote by investors, as the market expects a rate hike by 2022.

KEY TECHNICAL LEVELS TO WATCH

GBP/USD

Overview
Today last price 1.3657
Today Daily Change -0.0084
Today Daily Change % -0.61
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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