- The BoE's rate hike saw limited buying for the GBP/USD as the central bank warns of a slower rate of hikes looking forward.
- Friday's market focus is drifting towards the US Non-Farm Payrolls report.
The GBP/USD is trading just above the 1.30 major technical level after seeing a familiar sell-off pattern on Thursday.
The Bank of England (BoE) hiked their interest rate by 25 bps, but the Sterling still took a nose dive after the BoE's Governor Mark Carney suggested that the pace of future rate hikes will be incredibly slow, with the BoE projecting to engage in further rate increases around once a year. Pound traders took the rate of future hikes as a bearish sign, sending the GBP/USD sharply lower for Thursday after sending the pair into 1.3125 on reaction to the 25 bps rate hike.
Brexit concerns are also dragging on the Sterling, with EU-UK trade deal negotiations set to begin anew in a couple of weeks with UK Prime Minister Theresa May personally heading up trade negotiations, to the chagrin of her fractured ruling party within the UK parliament, with hard-line Brexiteers likely to reject any initial offers from the EU amidst calls that PM May is too willing to bow to European demands.
Friday sees the Markit Services PMI for the GBP at 08:30 GMT, forecast to come in at 54.7 versus the previous showing of 55.1, though the mid-tier indicator will be largely overshadowed by the US NFP job report, which drops on markets at 12:30 GMT to cap off a disappointing week for the Pound.
GBP/USD levels to watch
Momentum is leaning firmly towards the downside on the Sterling-Dollar pairing, and as FXStreet's own Valeria Bednarik noted, a break of the 1.3000 level will be seeing a dramatic selloff as the GBP/USD extends its current declines: "technically, the GBP/USD pair is biased lower, with room to break below the key 1.30 threshold, given that in the 4 hours chart, it is developing well below a bearish 20 SMA, while the Momentum indicator heads firmly lower within negative territory, as the RSI tries to stabilize around 29."
Support levels: 1.3010 1.2970 1.2925
Resistance levels: 1.3045 1.3085 1.3120
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
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold price finishes Thursday’s session set to reach new all-time highs
Gold price rallied during the North American session on Thursday and hit a new all-time high of $2,225 in the mid-North American session. Precious metal prices are trending higher even though US Treasury yields are advancing, underpinning the Greenback.
Bitcoin price extends retreat from $69K as old whales shift their holdings to new whales
Bitcoin price continues to move further away from the $69,000 threshold, gaining ground as BTC bulls hope for a retest of the $73,777 peak. This is because of the general assumption that clearing this blockade would set the tone for a reach higher, marking a new all-time high.
Bears have been standing before a steamroller so far this year
Despite a pushback on rate cuts from Christopher Waller, and what was supposed to be cautious trading sentiment ahead of critical US inflation data released later on Friday, the S&P 500 rose on Thursday, marking its best first-quarter performance in five years.