GBP/USD Forecast: British pound to struggle to rebound as Brexit tensions escalate
GBP/USD has failed to break above 1.3500 on Friday and started the new week on the back foot amid renewed Brexit tensions following the Bank of England's (BoE) dovish surprise. Unless the pair manages to make a daily close above 1.3500, recovery attempts are likely to remain limited in the near term with fundamental drivers remaining bearish.
In an interview with Bloomberg TV, BoE Governor Andrew Bailey reiterated that it's not their job to steer financial markets on interest rates. Following the BoE's November decision to leave the policy rate unchanged, the British pound suffered heavy losses against the greenback. Although the CME Group's BoEWatch Tool currently shows that markets are pricing a nearly 70% chance of a 20 basis points rate hike in December, GBP/USD is still having a tough time erasing its losses. Read more...
GBP/USD rebounds swiftly from daily lows, remains below 1.3500 mark
The GBP/USD pair quickly recovered around 35 pips from early European session lows, albeit whilst remaining well below the key 1.3500 psychological mark.
The US dollar kicked off the new week on a positive note amid a solid rebound in US Treasury bond yields. Despite the Fed's dovish outlook, investors seem convinced that the US central bank would be forced to adopt a more aggressive policy response to contain stubbornly high inflation. Apart from this, the cautious market mood further underpinned the greenback's relative safe-haven status and exerted some downward pressure on the GBP/USD pair. Read more...
GBP/USD continues to make it's way lower towards the 1.3166 mark – DBS Bank
GBP/USD has been going through a recent rough patch. A break under recent 1.3412 lows would mean a bearish triangle remains in play with better support coming in towards the 200-week moving average pegged at 1.3166, Benjamin Wong, Strategist at DBS Bank, reports.
“On the daily Ichimoku charts, there are two points to observe. GBP’s post-BoE risk event’s decline stalled into the 1.3412 prior low. This can naturally conjure a simple double bottom setup and has seen downside momentum recede a tad on the DMI ADX readings. However, for GBP to regain composure, it must progress over the intermediate cloud resistance at 1.3698 (and the key moving average at 1.3835).” Read more...
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