Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
British Pound Latest (GBP) - GBP/USD Eyes Fed Powell, EUR/GBP Upside Risks

British Pound Latest (GBP) - GBP/USD Eyes Fed Powell, EUR/GBP Upside Risks

What's on this page

GBP/USD, EUR/GBP Price Analysis & News

  • Markets Gearing up for a Dovish Powell
  • German-UK Real Yields Signal Upside Risks for EUR/GBP

Implied Daily Range: 1.3130-1.3280

The Pound is slightly better bid this morning despite reports overnight that Germany have scrapped plans to meet with EU ambassadors given the lack of tangible progress in trade talks. To my mind, the current trade talks reminds me a lot of the 2019 Brexit saga and with the official deadline in 2-months’ time, while the clock may be ticking, in the world of politics, 2-months is a lifetime. In turn, the base case remains for a basic trade deal, however, this will not be without short-term uncertainty to get there and thus expect upside in the Pound to be hard to come by until a deal is reached. One point to make is that with EU-UK trade talks at an impasse, a misconception is to look at GBP/USD and assume that little Brexit risk premium has been priced in, the Brexit Barometer, EUR/GBP has traded within a range for the past 3-months.

GBP/USD Bullish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -7% -5% -6%
Weekly -6% 9% -1%
Learn how to use Sentiment in your trading strategy
Get My Guide

Markets Gearing up for a Dovish Powell

A rather quiet week ahead of the main risk event, the Jackson Hole Summit. Markets have been gearing up for a dovish Jay Powell (speaking at 14:10BST) in a move to average inflation targeting following the Fed’s strategy review is baked in the price. That said, the question now turns to whether Fed Powell can provide enough to meet the dovish appetite that markets require. While the risk of disappointment is notably higher, I wouldn’t like to fight the Fed. Failure to meet dovish demands, then expect to see a pullback in the consensus trades of bearish dollar, US yields and bullish US tech. However, enough dovish signals to keep momentum going, expect cross-JPY to push higher, notably GBP/JPY with the added month-end flows talked about Tuesday.

German-UK Real Yields Signal Upside Risks for EUR/GBP

EUR/GBP Bearish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 10% -19% -1%
Weekly 20% -32% -4%
Learn how to use Sentiment in your trading strategy
Get My Guide

Source: Refinitiv. EURGBP vs German-UK 5yr Real Yields Spread (RHS)

10 Most Popular Candlestick Patterns

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES