- Cable bulls lick their wounds in post-BOE aftermath.
- Carney’s concerns on the economy and forecasts downgrade weigh on the GBP.
- Trade optimism-led dollar strength to persist ahead of US data.
The recovery attempts in GBP/USD continue to face stiff resistance near 1.2825 region, leaving the spot in a downside consolidation phase above the 1.28 handle, as the dust settles over the dovish Bank of England (BOE) monetary policy decision aftermath.
BOE’s dovish twist pounds the British pound
The main catalyst behind the Cable downward spiral a day before was the dovish twist seen in the BOE’s monetary policy announcement. The rates hit the lowest levels since September 24th at 1.2793 after the BOE MPC maintained the interest rates, however, two MPC members voted for a rate cut.
The cautious remarks from the BOE Governor Carney also exacerbated the pain in the pound. “Governor Carney, in his later speech, flagged the risks of a global economic downturn and warned that a no-deal Brexit would likely result in job losses and business closures”, FXStreet’s Chief Analyst, Valeria Bednarik, noted.
Meanwhile, the US-China trade deal hopes backed risk-on market profile sparked a massive rally in the Treasury yields, which in turn drove the US dollar broadly higher. Therefore, the Cable also was pressured by the rise in generalized demand for the greenback.
The focus will remain on the trade-related developments and USD dynamics amid a data-empty UK docket while the UK political headlines take a back seat, with rising dovish BOE expectations. Also, of note remains the UK Preliminary Michigan Consumer Sentiment data, due at 1500 GMT, for fresh dollar trades.
GBP/USD Technical levels to consider
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in daily range slightly below 1.0900
EUR/USD continues to move up and down in a narrow band slightly below 1.0900 in the second half of the day on Monday. The modest improvement seen in risk mood makes it difficult for the US Dollar to find demand and helps the pair stay in range.
GBP/USD treads water above 1.2900 amid risk recovery
GBP/USD is keeping its range play intact above 1.2900 in the American session on Monday. The positive shift seen in risk sentiment doesn't allow the US Dollar to gather strength and helps the pair hold its ground ahead of this week's key data releases.
Gold drops to fresh 10-day low below $2,390
Gold stays under persistent bearish pressure after breaking below the key $2,400 level and trades at its lowest level in over a week below $2,390. In the absence of fundamental drivers, technical developments seem to be causing XAU/USD to stretch lower.
Crypto Today: Bitcoin is less than 10% away from all-time high as Ethereum ETF approval anticipation brews
Bitcoin trades around $68,000 early on Monday, less than 10% away from its all-time high of $73,777 on Binance. Ethereum ETF anticipation brews among traders and Ether investment products see inflow of over $45 million in the past week.
Election volatility and tech earnings take centre stage
/stock-market-graph-gm532464153-55981218_XtraSmall.jpg)
The US Dollar managed to end the week higher as Trump Trades ensued. Safe-havens CHF and JPY were also higher while activity currencies such as NOK and NZD underperformed.