British Pound (GBP) Price Outlook: GBP/USD Range Trading to Persist
GBP price, news and analysis:
- GBP/USD continues to trade within the broad 1.38 to 1.40 range in place since April 16 and will likely continue to do so.
- That’s unless the Bank of England’s rate-setting monetary policy committee is more aggressive than expected after its meeting that ends Thursday.
GBP/USD range trading ahead of BoE monetary policy decision
GBP/USD can be expected to trade between 1.38 and 1.40 in the days ahead unless the Bank of England’s monetary policy committee is more aggressive on policy than analysts are expecting. A small tightening of policy is predicted via a minor tapering of the BoE’s asset-purchase program but a more combative move is not impossible given the extent of the UK economy’s recovery in the current quarter.
The risk for GBP/USD is therefore tilted to the upside, with the February 24 high at 1.4242 a possible longer-term target if 1.40 were to break conclusively.
GBP/USD Price Chart, Two-Hour Timeframe (April 29 – May 5, 2021)
Source: IG (You can click on it for a larger image)
UK elections in focus
Domestically, Thursday’s other main focus will be elections for the Scottish and Welsh devolved authorities, a by-election in Hartlepool and elections in England for many councils, city mayors, and police and crime commissioners. These are not likely to have an impact on GBP though, particularly as the results will dribble out over several days.
--- Written by Martin Essex, Analyst
Feel free to contact me on Twitter @MartinSEssex
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.