British Pound (GBP) Price Outlook: GBP/USD Range Trading to Persist Ahead of UK CPI
GBP price, news and analysis:
- GBP/USD barely responded to the latest UK employment data and will likely continue to trade sideways.
- UK inflation numbers due Wednesday will be more important but are not likely to change Sterling’s course ahead of or after the FOMC’s latest announcement on US monetary policy later in the day.
GBP/USD range trading to persist
GBP/USD shrugged off a broadly positive UK employment release Tuesday and will likely continue to trade within a relatively narrow trading range both before and after Wednesday’s two key reports: the first on UK inflation and the second on the decisions on US monetary policy made at the latest two-day meeting of the Federal Open Market Committee.
As the chart below shows, the key resistance level to watch out for is the 1.4249 high recorded on June 1 and the key support level is the 1.4070 low touched yesterday before the pair rallied.
GBP/USD Price Chart, Two-Hour Timeframe (May 18 – June 15, 2021)
Source: IG (You can click on it for a larger image)
While a delay of a month in UK coronavirus restrictions being lifted is mildly negative for GBP it was expected, and anyway is being offset by strong UK economic data and news of a trade deal between the UK and Australia. Speculation on who will be the next Bank of England Chief Economist when Andy Haldane leaves after this month’s meeting of the Bank’s monetary policy committee could bring some uncertainty to GBP but is not likely to move it far from current levels.
As for the inflation data, increases are expected but are not likely to shift the dial on UK monetary policy.
--- Written by Martin Essex, Analyst
Feel free to contact me on Twitter @MartinSEssex
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