GBP/USDFUNDAMENTAL HIGHLIGHTS:
GBP/USD Risking a Break of 1.30
The Bank of England is expected to deliver its third rate hike next week, however, while last month showed a surprise 5-4 vote split, narrowly missing a 50bps hike, it is likely the MPC will stick with a step by step approach and hike 25bps. That said, while the Pound is likely hold onto its gains against the Euro, there are worrying signs for GBP/USD with the failure to hold onto its previous lows at 1.3150. The pair is also set to close the week below its 200WMA and thus a break of 1.3000 beckons. Keep in mind, that while we have the BoE, we also have the Federal Reserve, which after the ECB’s hawkish surprise, Fed Chair Powell may well provide another hawkish surprise. In turn, should we see a firm break of 1.3000, risks are geared towards 1.2850. Bias is to fade GBP/USD rallies into 1.3150-1.3200.
GBP/USD Chart: Weekly Time Frame
Source: Refinitiv
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EUR & GBP Suffer From Rising Stagflation Concerns
Both the Euro and GBP have been among the underperformers since Russia began invading the Ukraine given their exposure to Russia. At the same time, with stagflation concerns picking up, both currencies are likely to remain under pressure against their counterparts and thus EUR/GBP can be expected to trade in ranges in the short term.
Source: Google trends
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