British Pound (GBP) Latest: Cable Awaits BoE MPC Speeches Next Week
GBP/USD FUNDAMENTAL FORECAST: MIXED
- BoE speeches in focus next week.
- Recent UK economic data supportive of GBP upside.
- Russia/Ukraine pressures continue to hang over markets.
CABLE FUNDAMENTAL BACKDROP
The week ahead holds quite a few market moving events from the pound perspective. Several Bank of England MPC members are scheduled to deliver speeches which could bring some price volatility to GBP crosses. After positive UK economic data this week including employment, retail sales and CPI, we could see a more hawkish view adding to the recent pound rally.
Geopolitical tensions are still the main market influencer driving global markets ebbing and flowing from risk on to risk off almost daily. Despite this, the clash between dollar and pound fundamentals looks likely to neutralize each other but with the dollar being over extended (relative to the pound) to the short side, a reversal in the trend could see GBP/USD move lower.
GBP/USD TECHNICAL ANALYSIS
GBP/USD DAILY CHART
Chart prepared by Warren Venketas, IG
GBP/USD price action has been testing channel resistance this week with no established push higher as of yet. Next week could spark the necessary motivation needed should BoE MPC officials add to the already aggressive outlook however, from a technical perspective upper long wicks suggest price rejection at recent swing highs (1.3644).A close below the 1.3600 psychological handle could see bears re-enter, augmenting a downside bias.
Key resistance levels:
Key support levels:
- 1.3579 – 23.6% Fibonacci
IG CLIENT SENTIMENT: BULLISH
IG Client Sentiment Data (IGCS) shows retail traders are currently marginally short on GBP/USD, with 56% of traders currently holding short positions (as of this writing). At DailyFX we typically take a contrarian view to crowd sentiment resulting in a bullish bias.
Contact and follow Warren on Twitter: @WVenketas
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.