GBP/USD Forecast: Pound rebounds ahead of Fed, faces next resistance at 1.2130
GBP/USD has turned north on Wednesday and managed to erase a portion of its weekly losses. The renewed dollar weakness ahead of the Federal Reserve's policy announcements fuels the pair's rebound but Brexit-related jitters could limit the upside in the near term.
The improving market mood on the European Central Bank's decision to hold an emergency meeting to address the fragmentation issues makes it difficult for the greenback to find demand early Wednesday. Reflecting the risk-positive market environment, the UK's FTSE 100 Index is up more than 1% on the day and US stock index futures are rising between 0.6% and 0.8%. Read more...
GBP/USD: At risk of extending its slumps to the 1.17-1.18 area – ING
GBP/USD briefly traded below 1.20 at the end of Tuesday’s session, having fallen to the March 2020 lows. Economists at ING expect the pair to extend its decline toward the 1.17/18 region.
“It does appear to us that a lot of negatives regarding a slowdown in the UK economy are in the price, but there is still some downside risk related to a potential re-pricing in the Bank of England rate expectations, which continue to be overly hawkish (more than seven rate hikes expected by year-end).” Read more...
GBP/USD: Rebound remains capped below 1.2100 ahead of the Fed
GBP/USD is consolidating the steep upsurge below 1.2100, as bulls take a breather after extending the recovery by over 150 pips.
The main catalyst behind cable’s impressive rebound could be linked to the broad-based US dollar correction, as investors take profits off the table on their USD longs ahead of the all-important Fed interest rate decision. The Fed pre-committed to a 50 bps rate hike in June and July, although markets have baked in a 75 bps lift-off after Friday’s hot US inflation. Read more...
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