POUND STERLING TALKING POINTS
- UK GDP in focus.
- Technical analysis reveals market uncertainty.
GBP/USD FUNDAMENTAL BACKDROP
The Bank of England (BoE) rose rates of interest final week however markets centered on the central banks expectation of a recession in This autumn this 12 months. Recession discuss has been stewing of late and now that the BoE surprisingly aired their interpretations of the present UK financial local weather, subsequent weeks GDP launch will carry much more weight than any earlier points this 12 months.
The remainder of the week focuses on U.S. centric knowledge however general a comparatively uneventful week with no actual scheduled exercise from Fed audio system both.
GBP/USD ECONOMIC CALENDAR
Source: DailyFX Economic Calendar
GBP/USD DAILY CHART
Chart ready by Warren Venketas, IG
GBP draw back prolonged on Friday after the U.S. NFP beat with cable nearly reaching the 1.2000psychological degree. Daily GBP/USD worth motion reveals nothing in the best way of chart patterns of a agency directional bias – reiterated by the midpoint 50 studying on the Relative Strength Index (RSI). My view on GBP/USD stays skewed to the draw back as recession prospects, geopolitical tensions, stronger U.S. economic system and an unrelenting Fed helps a stronger buck towards the pound and the 1.2400 degree appears a great distance off at this level ceteris paribus.
Key resistance ranges:
- 1.2400/100-day EMA (yellow)
- 50-day EMA (blue)
Key assist ranges:
- 1.2080/20-day EMA (purple)
MIXED IG CLIENT SENTIMENT
IG Client Sentiment Data (IGCS) reveals retail merchants are at the moment LONG on GBP/USD, with 72% of merchants at the moment holding lengthy positions (as of this writing). At DailyFX we sometimes take a contrarian view to crowd sentiment nonetheless resulting from latest modifications in lengthy and brief positions we choose a short-term cautious bias.
Contact and observe Warren on Twitter: @WVenketas