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GBP/USD Capped Ahead of BoE- AUD Rebound at Risk on Slowing China CPI

GBP/USD Capped Ahead of BoE- AUD Rebound at Risk on Slowing China CPI

David Song, Strategist

Talking Points:

- GBP/USD Holds Range Resistance Ahead of Bank of England (BoE) Policy Meeting.

- AUD/USD Rebound to Face Slowing China Inflation; Former Support in Focus.

- USDOLLAR Threatens Bearish RSI Momentum; FOMC Minutes in Focus.

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GBP/USD

GBP/USD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • GBP/USD may continue to face range-bound prices going into the Bank of England (BoE) interest rate decision amid the string of failed attempts to close above 1.4980 (38.2% retracement) to 1.5015 (38.2% expansion).
  • May see more of the same from the BoE ahead of the May election; will retail a flat bias on GBP/USD as long as the pair continues to close above the 1.4700-10 (78.6% expansion) region.
  • DailyFX Speculative Sentiment Index (SSI) shows the retail FX crowd has flipped back net-long GBP/USD just ahead of the European close, with the ratio now sitting at +1.05.

AUD/USD

AUD/USD Daily Chart
  • AUD/USD may continue to hold below former-support around 0.7720 (161.8% expansion) to 0.7740 (78.6% expansion) as China – Australia’s largest trading partner – is expected to face a further slowdown in consumer price inflation.
  • Lack of momentum to push & close above former-support may limit the rebound in AUD/USD and generate range-bound price action throughout April.
  • Will continue to keep a close eye on the 0.7570 (50% expansion) to 0.7590 (100% expansion) range amid the failed attempts to close below the key zone.

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Read More:

Price & Time: USD Searching For Trend

AUDJPY Snaps 9 Day Losing Streak- Long Scalps Favored Above 91.20

USDOLLAR(Ticker: USDollar):

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

12002.71

12047.24

11981.32

-0.38

76.94%

GBP/USD Capped Ahead of BoE- AUD Rebound at Risk on Slowing China CPIUSDOLLAR Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Dow Jones-FXCM U.S. Dollar remains at risk of facing a larger correction as Fed Governor Jerome Powell and New York Fed President William Dudley highlight the ongoing slack in the real economy along with concerns surrounding the appreciation in the greenback.
  • May see a more dovish Federal Open Market Committee (FOMC) Minutes as central bank officials push back their interest rate forecast, while weak energy prices have shown little evidence of boosting private-sector consumption, one of the leading drivers of growth and inflation.
  • Will keep a close eye on the retracement from the late-February advance, with the 50% retracement (11,943) and the 23.6% retracement (12,052) in focus.Join DailyFX on Demand for Real-Time SSI Updates!

Release

GMT

Expected

Actual

Fed’s Narayana Kocherlakota Speaks on U.S. Economy

12:50

--

--

IBD/TIPP Economic Optimism (APR)

14:00

49.0

JOLTS Job Openings (FEB)

14:00

5003

Consumer Credit (FEB)

19:00

$12.250B

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--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

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