GBPUSD Bounces Off Key Trendline Support from Flash Crash Low - US Market Open
MARKET DEVELOPMENT –GBPUSD Bounces Off Flash Crash Trendline Support
USD: Ahead of a key risk events, the greenback is holding onto Friday’s gains following the robust retail sales data. The focus for USD pairs will be on the FOMC meeting on Wednesday and whether the central bank will meet the aggressive dovish market expectations. While there is no move expected in this week’s meeting, the central bank is seen easing by 25bps at the July meeting, according to Fed Funds Futures.
EUR: Amid the sizeable decline in inflation expectations, traders will be paying close attention to commentary from ECB’s Draghi, who may provide fresh policy signals in order to address the plummet in inflation expectations. The Euro is slightly firmer this morning, with 1.12 holding in EURUSD, while EURGBP made another push above 0.8900. Of note, large option expiries between 1.12 and 1.13 could keep EURUSD within a relatively tight range ahead of the Fed meeting.
GBP: Initial weakness in the Pound had been curbed having bounced off the trendline support from the GBP flash crash low, while the slight pullback in the USD index had also aided the currency to test the 1.26 handle. Elsewhere, the BoE are scheduled to release their latest monetary policy outlook, however, while there has been increased hawkish rhetoric from several members, the central bank remains tight lipped by the ongoing Brexit uncertainty.
Source: DailyFX, DTCC
Source: DailyFX, Thomson Reuters
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--- Written by Justin McQueen, Market Analyst
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