British Pound Boosted by Soft US Dollar. Will GBP/USD Rally into BoE This Week?
British Pound, GBP/USD, US Dollar,Crude Oil, RBA, AUD/USD - Talking Points
- The British Pound bounced off lastweek’s low as the US Dollar struggled
- Crude oil surges higher as risks grow and OPEC+ appear unable to lift output
- The RBA turned hawkish, but AUD sunk, will a BoE hike do the same to GBPUSD?
The British Pound has rallied against a sinking US Dollar, but it has struggled against the Euro ahead the Bank of England Monetary policy meeting on Thursday. According to a Bloomberg survey, it is anticipated that they raise rates by 25 basis points to 0.50%.
The US Dollar was softer across the board as last weeks Fed decision continues to be digested by markets.
The RBA tightened monetary policy today, but it wasn’t hawkish enough to please currency markets. They abolished the asset purchase program but left rates unchanged at 0.10% for the cash rate target.
The Australian Dollar was over 1% higher ahead of the RBA’s decision but fell around 0.5% on the news before recovering the intra-day-loss.
Futures markets are pricing in a 15 basis point hike for the June meeting, or a full 25 basis point hike by the July meeting
Crude oil continues to press higher to start the month after a 17.2% rally in January. Geopolitical risks on the Ukrainian border, OPEC+ inability to lift production supply and an icy storm front heading into North America have all propelled black gold higher.
Many Asian markets were close due to Chinese Lunar New Year. Australia, Japan and New Zealand saw their equities move higher following on from a strong lead from Wall Street.
The Nasdaq was up 3.41% in the cash session, but futures markets are pointing toward slight weakness for the North American open for the US indices.
The US will see a manufacturing PMI number followed by the ISM manufacturing survey.
British Pound Technical Analysis
Monday’s close was back inside the Bollinger Band. This could indicate a pause in bearishness or a potential reversal.
Support might be at the pivot points and previous lows of 1.3431, 1.3375, 1.3358 and 1.3161.
On the topside resistance may lie at a pivot point and prior high at 1.3573, 1.3749 and 1.3834
--- Written by Daniel McCarthy, Strategist for DailyFX.com
To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.