- GBP/USD pair has dropped to near weekly low around 1.1922 despite easing risk-off mood.
- Consideration of policy slowdown or a pause in the policy tightening spell by the BoE could push Sterling on the back foot.
- The Cable is hovering near the horizontal support of the Descending Triangle plotted from 1.1920.
The GBP/USD pair has dropped to near weekly low around 1.1922 in the early Asian session. The Cable is expected to be dumped by the market participants as the street is anticipating a pause or a deceleration in the pace of interest rate hiking by the Bank of England (BoE) despite the fact that the United Kingdom inflation is still trending in the double-digit figure.
Analysts at Commerzbank are of the view that “Bailey is not really committing very firmly to further strong tightening measures. In view of an inflation rate in double-digits, I would have hoped for more commitment toward rate hikes. But obviously, the BoE is not willing to inflict (further) harm on the economy and the population to get a grip of inflation.”
Meanwhile, the market sentiment looks positive as risk-sensitive assets like S&P500 has shown a decent recovery on Thursday. The US Dollar Index (DXY) is struggling to recapture the 105.00 resistance as the risk aversion theme is fading gradually.
GBP/USD is auctioning near the horizontal support of the Descending Triangle chart pattern plotted from February 17 low around 1.1920 on a four-hour scale. The downward-sloping trendline of the aforementioned chart pattern is placed from the February high at 1.2402.
The 100-period Exponential Moving Average (EMA) at 1.2060 will act as a major barricade for the Pound Sterling.
Meanwhile, the Relative Strength Index (RSI) (14) has slipped below 40.00 from the 40.00-60.00 range, indicating that the bearish momentum could be triggered.
A confident break below February 17 low at 1.1915 will drag the Cable firmly towards January 5 low at 1.1875 followed by the round-level support at 1.1800.
On the contrary, a move above February 24 high at 1.2040 will drive the asset towards February 23 high around 1.2080. A breach of the latter will expose the asset to February 21 high of around 1.2140.
GBP/USD four-hour chart
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
AUD/USD resumes decline toward 0.6400; US NFP awaited
AUD/USD has witnessed a fresh leg down toward 0.6400 in Friday's Asian trading. The pair faces headwinds from a borad US Dollar rebound amid souring risk sentiment on geopolitics. Rising bets for early RBA rate cuts and China's economic woes add to the pair's downside. US NFP data is next in focus.
USD/JPY hovers around 150.00, looks to US NFP for meaningful impetus
USD/JPY ranges at around 150.00 early Friday as traders seem reluctant amid wavering expectations that the BoJ will deliver a rate hike later this month and ahead of the crucial US NFP report. A slight deterioration in risk sentiment, trade war fears, and the recent decline in the US bond yields limit the pair's upside.
Gold price sits at weekly low near $2,615, with eyes on US NFP
Gold price sits at weekly lows near $2,615 early Friday following the previous day's slide. Traders await the US NFP report, which will guide Fed policymakers on their next policy move and influence the non-yielding bright metal.
Ripple's XRP to feature in Nasdaq-listed Worksport’s corporate treasury
Ripple's XRP is down 5% on Thursday following an announcement from Tonneau cover manufacturer Worksport that it would add the remittance-based token as part of its corporate treasury.
What is NFP and how does it affect the Forex market? Premium
NFP is the acronym for the Nonfarm Payrolls report, a compilation of data reflecting the employment situation in the United States (US). It shows the total number of paid workers, excluding those employed by farms, the federal government, private households, and nonprofit organisations.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.