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EURGBP - BOE decisions will make the GBP rise!?The EURGBP currency pair is below the EMA200 and EMA50 in the 4H timeframe and is moving in its descending channel. In case of an upward correction due to economic data this week, we can see a supply zone and resell within that zone with a suitable risk reward. Reaching the demand zone of this currency pair will lead to scalp buying opportunities. The UK energy regulator has approved a £2 billion funding package to build a high-voltage “electricity superhighway” beneath the North Sea. This project, known as the “Eastern Green Link 1,” involves laying 196 kilometers of cable to transfer wind power from Scotland to northern England. The initiative is expected to supply electricity to approximately two million homes. Rachel Reeves, the UK’s finance minister, stated that the government aims to achieve broad and resilient economic growth. She also reaffirmed the Bank of England’s target of maintaining a 2% inflation rate. Andrew Bailey, Governor of the Bank of England, noted that inflation in the services sector remains above levels compatible with the inflation target. He stressed the need for close monitoring of this sector, as it reflects labor market developments. Bailey further mentioned that a gradual approach to easing monetary policy restrictions would help manage inflation-related risks more effectively. Meanwhile, the European Commission has warned of heightened risks in its economic outlook due to the war in Ukraine, tensions in the Middle East, and protectionist trade policies. The Commission estimates Germany’s GDP growth to rise by 0.7% in 2025, down from an earlier forecast of 1.0%. Additionally, public debt in the Eurozone is expected to increase from 89.1% in 2024 to 90.0% by 2026. Inflation rates are projected at 2.4% for 2024, 2% for 2025, and 1.9% for 2026. A Bloomberg survey revealed that economists now believe Germany may face a second consecutive year of declining output. Analysts expect Germany’s GDP to shrink by 0.1% in 2024 following a 0.3% contraction in 2023.A month ago, predictions still pointed to an economic slowdown only for this year. Fabio Panetta, a member of the European Central Bank (ECB), stated that persistent weakness in domestic demand might drive inflation below 2%. He suggested that the ECB should consider shifting toward a neutral or even expansionary monetary policy. Panetta noted that the Eurozone economy remains weak, with no turning point visible in the manufacturing sector. He emphasized the need for the ECB to adopt a forward-looking approach, as excessive tightening of current monetary policies is no longer necessary. Robert Müller, another ECB official, remarked that there is no need for larger-scale measures at this time. He also hinted at the possibility of a 25-basis-point rate cut in December.
Short
by Ali_PSND
1
UK inflation expected to jump to 2.2%The British pound is steady on Tuesday. In the North American session, GBP is trading at 1.2678 at the time of writing, unchanged on the day. On Monday, the pound ended a six-day slide, during which the currency lost 2.8%. The Bank of England has done an excellent job slashing inflation, which was in double digits for much of 2023. The September inflation report was a milestone as inflation eased to 1.7%, the first time it was below the BoE target of 2% since April 2021. Still, the BoE is under no illusions that the tenacious battle against inflation is over. Services inflation has fallen significantly but is running at 4.9%, more than double the target. The Trump election win has raised deep concerns that Trump’s trade policy promises, with threats of tariffs on US trading partners, could lead to higher global inflation. The BoE lower rates by 25 basis points on Nov. 7, marking the second rate cut in the current easing cycle. The September inflation report contributed to the decision to lower rates at that meeting and Wednesday’s inflation release will be closely monitored by the BoE, with the following inflation report coming out on Dec. 18, just one day before the BOE’s next rate announcement. BoE Governor Bailey said in a report to the House of Commons Treasury select committee that the BoE needed to keep a close eye on services inflation, which remained above a level that was compatible with “on target inflation”. Bailey also stated that he favored a gradual approach to cutting rates in order for the central bank to assess the effects of the government’s recent budget on growth and inflation. The BoE’s November forecasts indicate that the budget will result in higher growth and inflation in the near term, which could slow the pace of rate cuts. GBP/USD Technical There is resistance at 1.2707 and 1.2736 1.2629 and 1.2658 are the next support levels
by OANDA
GBPNZD - Will the pound continue to rise?!The GBPNZD currency pair is located between the EMA200 and EMA50 in the 4H timeframe and is moving in its downward channel. In case of a downward correction, we can see the demand zone and buy this currency pair in that range with the appropriate risk reward. Breaking the ceiling of the descending channel will provide the way for this currency pair to rise to the specified resistance range. Barclays Institute Remains Optimistic About the British Pound’s Growth Until 2025 Key highlights of the analysis are as follows: • Strengthening ties between the UK and the European Union are expected to provide long-term support for the British economy and pound, boosting its positive outlook. • The financial packages announced by the UK government, amounting to approximately 1% of GDP, have stimulated domestic demand and delayed the Bank of England’s (BoE) interest rate cut cycle. • A critical uncertainty lies in whether higher labor costs will lead to inflationary pressures or a reduction in employment, both of which could impact supply. • The UK’s trade deficit in goods with the United States indicates that, compared to the Eurozone, Britain is less exposed to the direct risks of potential US tariffs. This creates a favorable distinction for the pound over the euro. Barclays predicts that the pound will maintain a positive trajectory through 2025, supported by fiscal resilience, limited exposure to tariff risks, and structural improvements in UK-EU relations. These factors position the pound for gains against both the dollar and the euro, though uncertainties related to labor costs remain a critical factor to monitor. Remarks by Ramsden: Ramsden, a member of the Bank of England, noted that wage growth is more likely to align closer to 2% rather than 4%. He highlighted that the economy is on track to return to normalcy, with inflation stabilizing at a low level and expected to continue this trend. In the short term, inflation is anticipated to remain near the target, while in the long term, it could fall significantly below it. However, the impact of higher social insurance taxes on key economic indicators like prices, wages, and unemployment remains unclear. New Zealand’s Economic Outlook: Meanwhile, New Zealand’s Treasury has forecast a deeper economic downturn, which is placing greater pressure on tax revenues. According to Dominic Stephens, the Treasury’s chief economic advisor, the economic contraction has been sharper than expected, posing serious challenges for the government’s efforts to reduce its budget deficit. Recent evidence suggests that economic and fiscal forecasts, set to be released on December 17, will likely be further downgraded. Data indicates that New Zealand consumers are spending less than they did last year, and businesses remain pessimistic about their economic prospects.
Long
by Ali_PSND
GBPJPY - Will the pound continue to weaken?The GBPJPY currency pair is above the EMA200 and EMA50 in the 4H timeframe and is moving in its medium-term bullish channel. If the correction continues to the support range, we can buy with a suitable risk reward. Breaking the resistance range will pave the way for this currency pair to continue its rise. Pension Reforms in the UK • Consolidation of Local Government Pension Schemes: Rachel Reeves, the UK Treasury Secretary, aims to merge local government pension schemes into larger funds (megafunds). This initiative involves pooling the assets of 86 local government pension schemes into a large fund managed by professional investment managers. • Objective: To increase investment in long-term, high-risk assets, reduce management costs, and strengthen investment in infrastructure and local areas. • Further Reforms: In addition, Reeves plans to make changes to financial arbitration services and the combined stock market, marking “the most significant pension reforms in decades.” Inflation Outlook and Interest Rates in the UK • Comments from Bank of England Member, Mann: Bank of England member, Mann, warned that substantial volatility in macroeconomic indicators will be seen in the coming years. He suggests that inflation may remain high for an extended period, necessitating a higher neutral rate. Additionally, he noted that lower interest rates compared to high inflation would put more pressure on investments. Japan’s Support Package and Economic Stimulus • Budget and Household Support: The Japanese government has planned a supplementary budget of 13.5 trillion yen (87 billion USD) to fund an economic stimulus package. This budget includes a payment of 30,000 yen to low-income households and 20,000 yen per child in households with children. • Energy Subsidies: The government will also reintroduce electricity and gas subsidies from January for three months to help households cope with rising fuel and service costs. Financial Risks and Supervision by the Bank of Japan • Concerns About Non-Bank Financial Institutions: The Bank of Japan’s Deputy Governor, Uchida, warned that increased connections between non-bank financial institutions and banks could pose risks to the entire financial system. He emphasized that non-bank institutions handle almost half of global financial intermediation, which requires close attention. Actions for Stability in Japan’s Currency Market • Currency Market Intervention: Japan’s Finance Minister, Katsunobu Kato, stated that appropriate measures will be taken to control severe and one-sided fluctuations in the currency market if necessary. He stressed the importance of sustainable exchange rate movements in line with fundamental principles.
Long
by Ali_PSND
GBPUSD - Is inflation under control in America?!The GBPUSD currency pair is located between EMA200 and EMA50 in the 4H timeframe and is moving in its downward channel. If the downward trend continues due to the release of today's economic data, we can see the demand zones and buy within those zones with the appropriate risk reward. In case of an upward correction, this currency pair can be sold within the specified supply zones. The Governor of the Bank of England noted that the UK’s Consumer Price Index (CPI) does not accurately indicate whether underlying inflation dynamics have been suppressed. There remains a risk of rising energy prices, and inflation within the services sector is notably resilient and persistent. He anticipates greater volatility ahead, with some inflationary drivers potentially shifting upwards. Additionally, according to new data from the Cleveland Federal Reserve, the inflation trend in the U.S. continues to remain above 2 percent. The Median CPI for the previous month was reported at 4.09 percent, a slight increase from 4.08 percent in the prior month. Since June, this measure has only seen a minor decline, from 4.15 percent to the current level. Median CPI is a monthly inflation indicator that measures price changes at the midpoint of a basket of goods. Although this method may differ from the standard CPI, it focuses on items that fall within the midpoint of the distribution. Charts within this report show that other inflation indicators are relatively stabilized, while the decline in the headline CPI is primarily due to a drop in energy prices, which is considered a temporary factor. According to the Federal Reserve Bank of New York, despite ongoing challenges, debt levels remain manageable. Although delinquency rates have risen, income growth continues to outpace household debt growth. In the third quarter, delinquency transition rates varied, with credit card delinquencies improving, while delinquency rates for auto loans and mortgages saw a decline. At the end of Q3, 3.5 percent of debt was in some stage of delinquency, up from 3.2 percent in Q2. Overall delinquency rates also increased during this period. According to the data, credit card balances in Q3 rose 8.1 percent compared to the same period last year, reaching $1.17 trillion, marking an increase of around $24 billion from Q2. Additionally, mortgage balances increased by $75 billion in this period, reaching $12.59 trillion.
Long
by Ali_PSND
GBPAUD: Australia will continue its economic growth?!The GBPAUD is below the EMA200 and EMA50 in the 4H timeframe and is moving in its medium-term bullish channel. In case of upward correction, we can see the supply zone and sell within that zone with appropriate risk reward. The breaking of the upward trend line will pave the way for this currency pair to fall to the demand zone. In this demand zone we can open GBPAUD buy positions. The Fitch rating agency has reaffirmed Australia’s AAA credit rating with a stable outlook, even as it highlighted the country’s higher debt levels compared to similarly rated peers. Fitch stated that Australia remains committed to fiscal sustainability rules, which have contributed to nearly 30 years of economic expansion before the pandemic. Jim Chalmers, Australia’s Treasurer, warned that a potential victory for Donald Trump in the U.S. elections could create short-term economic pressures for Australia, manifesting as lower production and increased inflationary pressures. Chalmers also mentioned that Australia is prepared to face potential challenges from a Trump administration. Chalmers, revealing Treasury’s modeling results that took a Trump victory into account, indicated that there could be a slight decrease in output and additional price pressures. However, the characteristics of Australia’s economy provide it a relative advantage compared to other countries. Meanwhile, Barclays has revised its forecast and now expects the Bank of England (BOE) to keep the bank rate unchanged in December. This change is due to BOE’s more cautious tone and its emphasis on uncertainty and gradual policy moves. Barclays also anticipates that the BOE will reduce interest rates in several 25-basis-point increments over the next year, ultimately bringing the terminal rate to 3.50%. Bloomberg reported that Rachel Reeves, the UK’s Chancellor of the Exchequer, is facing serious challenges just 10 days after presenting her first budget. Rising borrowing costs and weaker economic growth have strained her £9.9 billion fiscal space set aside for her “stability” rule, which mandates that day-to-day expenses should be covered by taxes by 2029-30. Reeves now risks falling short of the Labour Party’s election promise to hold only one fiscal event per year and may need to secure additional funding before the 2025 budget.
Short
by Ali_PSND
GBP/USD falls ahead of UK employment reportThe British pound is lower on Monday. In the North American session, GBP/USD is trading at 1.2870, down 0.33% on the day. The pound is coming of a sixth straight losing week, declining 3.5% during that time. It’s a quiet day on the data calendar, with no US events and only one minor UK release. The UK releases the employment report for the three months to September on Tuesday. Job growth soared by 373 thousand in the prior report, crushing the market estimate of 250 thousand. The labor market is expected to reverse directions, with a market estimate of -50 thousand. As well, the unemployment rate is projected to inch up to 4.1%, up from 4%. Wage growth excluding bonuses is expected to fall to 4.7% in the three months to September, down from 4.9% in the previous report. Wage growth has been easing but is still high and BoE policymakers are concerned about the possibility of a wage-price spiral. The strong growth in wages has contributed to high inflation in the services sector. The BoE holds its final policy meeting in December and Tuesday’s jobs report could impact market expectations. The BoE reduced rates by 25 basis points last week to 4.75% but with inflation falling to 1.7% in September, more rate cuts are likely on the way. A host of Federal Reserve members will deliver remarks on Tuesday and investors will be looking for clues about future rate moves. The Fed lowered rates by 25 basis points last week, a move that was well-telegraphed in advance. What will the Fed do at the December meeting? That is much less clear, as the markets have priced in a pause at 23%, a 25-basis cut at 2.9%, and a 50-basis cut at 22%, according to the CME’s FedWatch. GBP/USD is testing support at 1.2870. Below, there is support at 1.2822 There is resistance at 1.2933 and 1.2981
by OANDA
GBPNZD - How will the BOE decision affect the pound?The GBPNZD currency pair is above the EMA200 and EMA50 in the 4H timeframe and is moving in its medium-term bullish channel. In case of downward correction, we can see the demand zones and buy this currency pair within those zones with appropriate risk reward. The Bank of England has lowered its interest rate by 0.25%, bringing it to 4.75%. According to the Bank’s monetary statement, GDP is projected to grow by 0.2% in Q3 2024 compared to the previous quarter (September forecast: 0.3%) and increase by 0.3% in Q4 this year. The goal is to keep the interest rate restrictive enough until the risks of inflation persistently returning to the 2% target diminish. Andrew Bailey, the Bank of England’s governor, noted that the rate of inflation decline has been faster than expected. However, further reduction in service price inflation is still needed to maintain the consumer price index at the 2% target level, and sufficient spare capacity will be essential to reach this goal in the medium term. The rise in the employer’s national insurance contribution, included in the budget, is expected to have a slightly inflationary effect on prices and a marginally negative impact on wages and corporate profitability. The combined effect of increased employer national insurance and minimum wage is likely to raise hiring costs, with the net impact on inflation yet to be determined. Adrian Orr, the Reserve Bank of New Zealand’s governor, highlighted geopolitical tensions as a significant risk to the economy, expressing concern over the economy lagging behind the interest rate cuts. Orr also emphasized that climate change poses an existential threat to New Zealand, calling for serious attention to this issue. This view reflects deep economic and environmental concerns in the country. The Reserve Bank of New Zealand’s Financial Stability Report indicates that the financial system remains resilient despite the economic downturn, with risks under control. Banks anticipate a slight increase in non-performing loans, although this level remains below what was experienced during previous economic recessions. Debt servicing costs have peaked and are now declining, with mortgage interest rates dropping over the past six months. Although many households and businesses are under financial pressure and some borrowers face challenges with rising unemployment, domestic economic challenges persist.
Long
by Ali_PSND
1
GBP/USD climbs after Bank of England cut ratesThe British pound has rebounded on Thursday. In the North American session, GBP/USD is trading at 1.2983, up 0.81% on the day. A day earlier, the pound took a drubbing, sliding 1.2%. There was no surprise as the Bank of England lowered the key interest rate by 0.25% to 4.75%. The markets had priced in the move at close to 100% and the Monetary Policy Committee voted 8-1 in favor of the cut, with one member voting to hold rates at 5%. The BoE has now lowered rates twice since its easing cycle in August. BoE policymakers had signaled that a rate cut was coming, as September inflation dropped sharply to 1.7%, the first time in over three years that inflation dropped below the BoE’s target of 2%. The central bank is expected to lower rates gradually in modest increments of 25 basis points in the coming months, but last week’s UK budget could complicate things. The budget included tax hikes and increased spending, which is expected to boost inflation. That could mean a pause at the next BoE meeting in December and a slower pace of rate cuts next year. The Federal Reserve meets later today, in the shadow of the dramatic US election, in which Republican Donald Trump cruised to a surprisingly easy victory over Democrat Kamala Harris. The Fed is virtually certain to trim rates by 0.25% to 4.5%-4.75%. With inflation easing, the Fed is expected to continue its rate-cutting cycle into 2025. GBP/USD pushed above resistance at 1.2920 earlier and then tested resistance at 1.3007 There is support at 1.2793 and 1.2706
by OANDA
EURGBP - How will BOE decisions affect the pound?The EURGBP currency pair is below the EMA200 and EMA50 in the 4H timeframe and is moving in its medium-term descending channel. In case of an upward correction due to the meeting of the Central Bank of England today, we can see the supply zones and sell within those zones with appropriate risk reward. Breaking the specified support range will pave the way for this currency pair to continue its decline Britain’s Treasury Secretary, Reeves, stated that it is still too early to make changes to economic forecasts following the U.S. election. He also expressed confidence that trade flows between the UK and the U.S. will continue under Trump’s presidency, noting that during Trump’s previous term, the two nations had a strong and constructive relationship. Reeves showed optimism about Britain’s role in shaping the global economic agenda. Meanwhile, the risk of a German government collapse appears more serious than ever. The German government has entered a new phase of political crisis that could potentially lead to the final breakdown of the ruling coalition. Last Friday, a document from Germany’s Finance Minister, Christian Lindner, was leaked, outlining his plans for economic reform in Germany. This document analyzes the economic challenges facing the country and offers proposals, such as corporate tax cuts and increased working hours. With internal tensions peaking, the likelihood of government collapse has risen. ECB Vice President De Guindos stated that the European Central Bank is committed to a data-driven, meeting-by-meeting approach and is increasingly confident in achieving the 2% inflation target. Goldman Sachs, in its latest report, has lowered its GDP growth forecast for the Eurozone in 2025 to 0.8%, down from the previous forecast of 1.1%. This revision was attributed to potential threats stemming from Trump’s tariff policies following his reelection.
Short
by Ali_PSND
RBA Holds, BoE Expected to Cut in Volatile Week Two major central bank decisions this week join the U.S. election as key events for markets, with interest rate reductions from the Reserve Bank of Australia and the Bank of England being considered. The RBA will announce its decision Tuesday (local time), with economists polled by Reuters forecasting no change to the current 4.35% cash rate. Persistently robust economic activity and sticky core inflation are thought to be keeping the central bank cautious. All major Australian banks—ANZ, CBA, NAB, and Westpac—expect the RBA to hold steady through year-end, projecting the first rate cut to come in February 2025. Meanwhile, the BoE is anticipated to lower its Bank Rate by 25-basis points on Thursday (local time), bringing it to 4.75%, according to a Reuters poll. Last week Britain's finance minister Rachel Reeves unveiled an unexpectedly large increase in borrowing and public spending, which prompted the Office for Budget Responsibility to raise inflation forecasts. However, analysts suggest that these fiscal moves won’t likely disrupt the BoE’s path toward a rate cut this week.
by BlackBull_Markets
BoE's plans for additional rate cuts are in conflict Expectations are mounting that the BoE would implement additional rate cuts. BoE Governor Andrew Bailey has stated that inflation is decreasing more rapidly than anticipated. The UK CPI for September registered at 1.7%, falling short of the central bank's 2% target, which has intensified speculation about upcoming rate increases. Wall Street is convinced that with UK inflation already below the target, there's a strong likelihood of additional rate cuts in November and December following the recent 25bp reduction. However, there are concerns regarding the potential aftereffects of hasty rate cuts. BoE economist Catherine Mann emphasizes that, despite a general slowdown in inflation, service price inflation continues to soar. She warns that an impulsive rate hike could reignite inflationary pressures. GBPUSD advanced to the 1.3000 threshold. After breaching the descending channel’s upper bound, the price holds above both EMAs, signaling a trend reversal. If GBPUSD breaches the resistance at 1.3045, the price may gain upward momentum toward 1.3265. Conversely, if GBPUSD fails to hold above both EMAs, the price may break the channel’s upper bound again and re-enter the descending channel.
by inkicho_exness
GBP/USD drops below 1.30 on soft inflation reportThe British pound has finally showed some movement on Wednesday after a week of limited movement. In the European session, GBP/USD is trading at 1.2992, down 0.62% on the day. The pound fell below the symbolic 1.30 level for the first time since August 20. The UK inflation report for September was projected to hit a milestone and fall below the BoE’s 2% target, but the reading exceeded expectations. CPI fell to 1.7% y/y, down from 2.2% in August and below the market estimate of 1.9%. This was the lowest level since April 2021 and was driven by lower prices for petrol and airfares. Services inflation, which has been stubbornly high, dropped from 5.6% y/y to 4.9%, its lowest level since May 2022. Monthly, CPI was flat, below 0.3% in August and below the market estimate of 0.1%. Core CPI also decelerated in September and was lower than expected (3.2% y/y and 0.1% m/m). As well, wage growth slowed to 4.9% in the three months to August, down from 5.1% previously. The Bank of England will be encouraged by the drop in inflation and in wages. The UK economy is groaning under the weight of a cash rate of 5% and the markets are looking at a rate cut in November as a done deal, while a December cut is a strong possibility. Many major central banks have shifted their primary focus from inflation risks to the labor market, and we could see the same with the BoE, now that inflation is back below the BoE’s target. GBP/USD has pushed below support at 1.3071, 1.3039 and 1.3004. The next support level is 1.2972 1.3106 and 1.3138 are the next resistance lines
by OANDA
GBP/USD - will inflation data shake up the pound?The British pound has been showing limited movement for over a week. In Tuesday’s North American session, GBP/USD is trading at 1.3086, up 0.13% on the day. The Bank of England has largely won the battle against inflation, which has fallen from double digits at its peak to just 2.2% in August and July. Inflation is expected to dip to 1.9% in September thanks to lower petrol prices, reflective of the decline in crude oil prices. This would be a milestone as inflation has been above the BoE’s target since April 2021. Monthly, inflation is forecast to ease to 0.2%, down from 0.3% in August. Core inflation, which excludes energy and food and is a better indicator of long-term inflation trends, is also expected to decline, from 3.6% to 3.4% y/y and 0.4% to 0.3% m/m. The BoE has cut rates only once this year and if inflation falls below 2% as expected, the calls for the central bank to cut rates will get louder. Inflation is falling, the economy is barely growing and the cash rate remains very high at 5%. The current trend has been to cut rates - the European Central Bank has lowered rates several times and even the Federal Reserve cut in September by 50 basis points. If the BoE doesn’t cut before the end of the year, it risks becoming an outlier among the major central banks. Governor Bailey has made conflicting comments about whether the BoE needs to get moving and  cut rates. It will be interesting to hear the Governor’s reaction to the latest inflation numbers. GBP/USD is testing resistance at 1.3076. Above, there is resistance at 1.3129 1.3016 and 1.2963 are the next support levels
by OANDA
Pound shrugs as UK economy grew by 0.2%The British pound is showing little movement on Friday in what has been a very quiet week for the currency. In the European session, GBP/USD is trading at 1.3071, up 0.10% on the day and its lowest level. The UK economy showed slight improvement in August with a 0.2% m/m gain, after no growth in both June and July. This was in line with expectations and the pound’s reaction has been muted. Services, construction and manufacturing were all in positive territory, as the economy continues to show signs of growth. On a yearly basis, GDP rose 1%, up from a revised 0.9% in August but shy of the market estimate of 1.4%. The slight rebound in the economy comes at a convenient time for the government, which will release the autumn Budget on October 30. The government is counting on the Bank of England to continue cutting rates in order to boost economic growth. Finance Minister Rachel Reeves has said that kick-starting the weak UK economy is the “number one priority. The Bank of England delivered its first rate cut of the new cycle in August but stayed on the sidelines in September. The next meeting is on November 7 and the UK releases inflation and employment data ahead of the meeting, which will likely determine whether Bank policy makers feel comfortable making another quarter-point cut. The US wraps up the week with the producer price index for September. Headline PPI is expected to tick lower to 1.7% y/y, compared to 1.6% in August. The core rate, however, is projected to rise to 2.7%, up from 2.4% in August. With inflation largely beaten, the Federal Reserve’s primary focus has shifted from inflation to employment. Still, an unexpected PPI reading in either direction could have an impact on the movement of the US dollar. GBP/USD is testing resistance at 1.3058. Above, there is resistance at 1.3095 1.3023 and 1.2986 are the next support levels
by OANDA
BoE is dovisher than the Fed. Will Sterling continue to fall? Sterling is exhibiting weakness as a robust US economy bolsters the dollar. With the likelihood of a substantial Fed rate cut now nullified by the strong US job market, speculation of further rate cuts by the BoE in November is exerting downward pressure on the GBPUSD. BoE Governor Andrew Bailey's statement about the potential for more aggressive rate cuts in response to ongoing inflation decline has intensified apprehensions about the BoE's hawkish monetary policy. It is also worth noting that the UK Treasury is expected to present a budget with tax hikes and austerity measures. This could exert pressure on near-term growth for the UK economy and lead to a decline in the value of the Sterling. GBPUSD maintained its downtrend and fell to 1.3060. The widening distance between both EMAs suggests a bearish momentum. If GBPUSD breaks the support at 1.3050, the price may fall further to 1.2960. Conversely, if GBPUSD breaches the resistance at 1.3250 and holds above both EMAs, the price could gain upward momentum toward 1.3435.
by inkicho_exness
GBP/USD steady as UK wage growth eases, GDP nextThe British pound has edged lower on Tuesday. In the North American session, GBP/USD is trading at 1.3055, down 0.14% on the day. UK wage growth eased in the three months to July, an encouraging sign for the Bank of England as it looks to continue lowering rates. Average earnings excluding bonuses climbed 5.1% y/y, down from 5.4% in the previous period and in line with the market estimate. This was the lowest level since June 2022. Wage growth is moving in the right direction but is still much too high for the BoE’s liking as it is incompatible with the target of keeping inflation at 2%. The UK labour market remains strong, as the unemployment rate edged down to 4.1%, down from 4%. The economy created 265 thousand jobs in the three months to July, up sharply from 97 thousand in the previous report and blowing past the market estimate of 115 thousand. The solid data means that the BoE isn’t under pressure to cut rates next week, and the markets are looking at another cut in November. The UK economy gets a report card on Wednesday, with the release of GDP for July. The economy flatlined in June and rose just 0.6% in the three months to June. Another weak GDP release could put pressure on the British pound. Investors will be keeping a close eye on Wednesday’s US inflation release. The Federal Reserve is now focused on employment now that inflation is between 2% and 3%, but a CPI surprise could shake up the markets and change market pricing for a Fed rate cut. The odds of a 50-basis point cut have been slashed to 29%, compared to 59% on Friday. There is resistance at 1.3167 and 1.3225 1.3069 and 1.3011 are providing support
by OANDA
GBP/USD extends gains as retail sales bounce backThe British pound has extended its gains on Friday. GBP/USD is trading at 1.2887 in the European session, up 0.31% on the day at the time of writing. It has been a winning week for the pound, which has climbed 1%. There was more good news from the UK economy as retail sales rebounded in July by 0.5% m/m, after a revised decline of 0.9% in June and in line with the market estimate. Annually, GDP surged 1.4%, compared to -0.8% in June and matching the market estimate. The pound has moved higher in response to the positive retail sales data. The bounce in retail sales reflects summer discounts and purchases related to the Euro 2024 and the Paris Olympics, such as apparel. As well, with inflation finally under control and running close to 2%, consumers are responding by opening up their wallets and purses. The positive retail sales report follows yesterday’s solid GDP release. The UK economy recorded rose 0.6% in Q2, a second straight quarter of growth. The economy is showing some strength in the second quarter but that may not have much effect on the Bank of England’s rate path. The increase in growth may not be sustainable and BoE policy makers have said that they are more focused on inflation, particularly service inflation, which remains much higher than the BoE’s 2% target. The markets are expecting further cutting before the end of the year and have priced in a rate reduction at the November meeting. GBP/USD is testing resistance at 1.2884. Above, there is resistance at 1.2914 1.2841 and 1.2811 are the next support levels
by OANDA
GBP/USD dips after strong US retail salesThe British pound posted losses earlier but has clawed back and is in positive territory. GBP/USD is trading at 1.2846 in the North American session, up 0.20% on the day. After sustaining a technical session in the second half of 2023, the UK economy is on a rebound. GDP climbed 0.6% in the second quarter, in line with expectations and a notch lower than the Q1 gain of 0.7%. On an annualized basis, GDP rose 0.9%, up from 0.3% and in line with the market estimate. The annualized gain was the strongest growth rate since Q3 of 2022. The strong GDP data comes on the heels of yesterday’s inflation release. CPI for July rose to 2.2%, above the June gain of 2% but below the market estimate of 2.3%. The strong GDP could mean a pause at the September rate meeting. The markets are expecting the next rate cut in November, after the Bank of England delivered the first cut of the new rate-cutting cycle earlier this month. The US economy may have lost a step but don’t count the US consumer out. Retail sales jumped 1% m/m in July, up sharply from a revised -0.2% and blowing past the market estimate of 0.3%. The strong consumer spending data supports a modest rate cut of 25 basis points. Last week’s rout in the global markets raised expectations of a massive 50-basis point cut as a response to fears of a deterioration in the US economy. These fears have been allayed somewhat but if the US posts further weak numbers we could see panic return to the markets. GBP/USD pushed above resistance at 1.2838 earlier and is testing resistance at 1.2857. Above there is resistance at 1.2889 1.2706 and 1.2787 are the next support levels
by OANDA
GBP/USD shrugs as UK CPI rises less than expectedThe British pound is showing limited movement on Wednesday. GBP/USD is trading at 1.2844 in the European session, down 0.15% on the day. Headline inflation in the UK rose 2.2% y/y in July, up from 2% in June but below the market estimate of 2.3%. Perhaps most important for the Bank of England, services inflation slowed to 5.2%, the lowest since June 2022 and well below the BoE’s forecast of 5.6%. Monthly, inflation fell 0.2% in July, down from 0.1% in June and the first decline in six months. Core inflation fell from 3.5% y/y to 3.3% and monthly from 0.2% to 0.1%, also below expectations. The soft inflation report supports the case for another rate cut in September, which the money markets have priced in at 45%. The BoE joined the new phase of the central banking cycle when it cut rates on August 1 by a quarter-point to 5%. The BoE meets next on September 19. The UK released a mixed employment report on Tuesday. The unemployment rate dipped to 4.2% in the second quarter, down from 4.4% in Q1 and wage growth with bonuses slowed from a revised 5.8% y/y to 5.4%, its lowest level in two years. Still, this was much higher than the market estimate of 4.6% and is much higher than the inflation rate. Unemployment claims shot up to 135 thousand in July, blowing past the market estimate of revised 36.2 thousand and the market estimate of 4.6%.  There is resistance at 1.2833 and 1.2903  1.2792 and 1.2722 are the next support levels
by OANDA
British pound calm ahead of UK jobs reportThe British pound is drifting on Monday. GBP/USD is trading at 1.2768 early in the North American session, up 0.08% on the day. The UK releases the employment report for the three months to June and we could see signs of a cooling labour market. Annualized average earnings including bonuses, which has hovered between 5.5%-6% all year, is expected to fall sharply to 4.6%. The previous reading came in at 5.7%, the lowest since September 2022. The unemployment rate has remained unchanged at 4.4% for the past two readings, the highest since September 2021. Unemployment is expected to nudge up to 4.5% in the three months to June. This would signal that the labor market is weakening and would make If wage growth declines and the unemployment rate rises in tomorrow’s report, it would support the case for the Bank of England delivering another rate cut, perhaps as soon as next month. The BoE meets on September 19, just one day after the Federal Reserve is widely expected to cut rates by at least a quarter-point. The BoE joined the central bank trend of cutting rates earlier this month when it lowered rates by a quarter-point to 5%. We have entered a new phase of the central bank cycle, with most of the major central banks having already lowered rates. The Federal Reserve will almost certainly lower rates at the September meeting, but by how much? Just one month ago, the markets had priced in a quarter-point cut at 90%, according to the CME’s FedWatch, but then the US posted some weak numbers and the financial markets sank. This has boosted the likelihood of a half-point cut, which on Friday was around a 50/50 split with a quarter-point cut. Still, not everybody who has a say is urging a rate cut. Fed Governor Michelle Bowman, a voting member on the FOMC, said on Friday that she is hesitant about cutting rates, since inflation is “uncomfortably above” the 2% target and the labor market remains strong. GBP/USD is testing resistance at 1.2779. Above, there is resistance at 1.2801 1.2753 was tested in support earlier. The next support level is 1.2731
by OANDA