Forex Strategy Video: What Would Drive a GBPUSD, GBPJPY Reversal
• Since the market started building up its BoE rate forecasts, the pound has gained against all majors
• With CPI slipping below the BoE target and uptick in unemployment, hike hopes are easing
• Fading interest rate premium is a strong catalyst for GBPUSD and the pound, but we must chose carefully
Market conditions change, and our strategy should reflect those changes. We have coded the DailyFX-Plus strategies for Breakout, Range and Momentum to adapt to these market shifts.
The imminent Bank of England rate hike hope that Pound bulls were building towards over the months is losing tracttion. And, with this slip in confidence, GBPUSD and the other GBP crosses are at risk of reversal. Since July of last year, we have seen the sterling gain against all of its counterparts as a quick economic recovery evolved into hawkish rate forecasts. Yet, over this past week, we have seen the central bank back away from explicit economic targets for policy, inflation slip below target and the jobless rate tick higher. What fundamental drive do we need to feed a GBPUSD or GBPJPY reversal? What pound-based pairs still paint more favorable pictures for the sterling? We discuss this in today's Strategy Video.
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