GBP/USD backed into a corner thanks to BoE Carney's smokescreen, 1.40 back on the cards
|- A thin calendar and growing unease about a BoE rate hike will see the GBP with plenty of challenges for the week ahead.
- Q1 prelim GDP figures won't be hitting markets until Friday, giving traders plenty of time to fret.
The Sterling is searching for some bids as the new week opens and the GBP/USD finds itself near the bottom after getting pummeled last week, and the pair is trading just north of the 1.4000 major level once again.
GBP/USD last week: data, Carney spook Pound's bulls
The Bank of England's (BoE) Mark Carney turned on Sterling bulls last week when he raised doubts about the potential for a rate hike in May, further dampening buyers' attitudes on top of the bad run of macro data to come out of the UK recently.
GBP/USD Weekly Forecast: Clearance of smoke curtain on the rate hike front supports Sterling
The UK's economy has been softening worse than initially anticipated across the board, and the clock is running out for some positive news to give the BoE a reason to lift rates at their next meeting. This week will be a fairly muted affair for the GBP, until Friday's early session sees UK preliminary GDP figures.
Monday is a quiet read for the Pound, with nothing of note on the calendar, and Sterling traders will be increasingly focused on GDP numbers at the end of the week.
GBP/USD analysis: headed to April's low of 1.3965
GBP/USD Levels to watch
The GBP is set to suffer as markets re-ignite the old argument about just how gradual the BoE intends to be with their gradual rate increases, and the hesitation is on pace to eat away at the Sterling's bullish position on the charts, and as FXStreet's Chief Analyst Valeria Bednarik stated, "technically bearish, the pair has broken below the 61.8% retracement of its early April bullish run and is headed to complete a full retracement to 1.3965. In the daily chart, indicators head south almost vertically after crossing their mid-lines, as the 20 SMA gains downward traction around the mentioned Fibonacci level, reinforcing it as resistance at 1.4120. In the 4 hours chart, the 20 SMA heads sharply lower above the current level, while the pair accelerated south after freaking below its 200 EMA. Technical indicators in the mentioned chart maintain their bearish slopes despite being in oversold levels, in line with additional slides ahead."
Support levels: 1.3965 1.3920 1.3875
Resistance levels: 1.4040 1.4085 1.4120
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.