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GBPUSD - Where to next? GBPUSD (Cable) - Is it time to buy? Technical view of GBPUSD: Unfortunately, we've been stuck within a range for a while... Support: 1.38570, 1.37740, 1.36830 Resistance: 1.40020, 1.40785, 1.41600 Pattern: Double bottom - Could be producing inverse H&S. Personally, I've been bullish GBP for while since we had 'Brexit' yet we are still trying to sort that out ha! But overall, I am bullish as long as we have weak dollar we could see 2018/17 price action coming through as I stated since last yr. (Disclaimer: As a trader, my opinion can change at any moment) Key Tip: A great trader once told me, "Trade what you see, not what you think". I can produce you this beautiful chart full of my technical aspects, but only you can put your on edge and take part of this trade idea. Fundamentals: FOMC - Rates unchanged as expected, QE same pace continues and Powell did mention yesterday - It isn't time for 'tapering', also noted some assets prices are high. Dovish tone continue. I personally think we will have more of movement in August Jackson Hole. The Dovish tone brought down DXY for new low since February. SPX Record high as expected technically as well. EUR tested 1.2150, could extend towards 1.22/1.23 areas for EU - President macron easing from Lockdown coming soon. As well, let's take into account Biden proposal of high tax to pay back all this debt, the US equity market doesn't like this. Have a great day ahead. Trade Journal (Just a trade idea, not a recommendation)
by Trade_Journal
GBP: Current Sentiment DriversLatest Developments: April 26 – The UK’s coronavirus count increased to 4,406,946 cases (+2,064). April 21 – CPI for March increased to 0.7% Y/Y (prior 0.4%) and printed at 0.3% M/M (prior 0.1%). Core CPI increased to 1.1% Y/Y (prior 0.9%) and printed at 0.4% M/M (prior 0.0%). April 20 – The unemployment rate for February fell to 4.9% from a prior of 5.0% employment change printed at -73K while average earnings printed at 4.5% 3M Y/Y. For March, claimant count change printed at 10.1K. March 31 – GDP for Q4 printed at 1.3% Q/Q and -7.3% Y/Y, revised from 1.0% and -7.8%, respectively. The report published by the ONS also noted that household savings for the quarter grew to their biggest ever level. This is supportive of recent comments from the BoE, who expect a significant increase in consumer activity once lockdowns are lifted. March 18 – At their March meeting, the BoE kept its official Bank Rate unchanged at 0.10% and its QE programme at £895 billion. The BoE added that they do not intend to tighten policy until there is clear evidence that there is significant progress towards eliminating spare capacity and achieving its 2% inflation goal. Future Sentiment Shifts: There are several risks to GBP’s outlook, particularly with respect to the UK’s coronavirus/lockdown outlook and interest rate expectations. Of these two, expect the UK’s coronavirus outlook to play the more influential role in the short term as the UK’s coronavirus vaccine rollout continues to show signs of stabilizing its breakout, which in turn, should allow the UK to ease lockdown restrictions in the months ahead. However, in the medium term, as the market’s focus shifts, monetary policy should dominate. Regarding monetary policy, risks still remain; although, further easing appears unlikely at this point and markets looking for a hike in 2022. Primary Drivers: Bank of England – Monetary Policy in the UK remains highly influential to GBP’s fundamental outlook. Expectations for policy tightening should prove GBP positive, while expectations for policy easing should prove GBP negative. Brexit – The outlook for the UK’s exit from the EU in December remains a key influence for GBP as it poses significant risks to the UK’s economic outlook. With the UK set to leave at the end of the year and progress in negotiations between the UK and the EUR significantly hampered by the coronavirus outbreak, risks remain firmly tilted to the downside with a hard Brexit or even no deal Brexit remaining distinct possibilities.
by thunderpips
GBP - FUNDAMENTAL DRIVERSFUNDAMENTAL BIAS : BULLISH 1. Virus Situation Regarding the UK's coronavirus outlook, this remains encouraging with the UK's vaccine program having administered at least one dose to over half of the UK population. Given the current success of its vaccine program, the UK is now in the early stages of lifting lockdown restrictions. While the UK's coronavirus outlook is improving, we expect GBP to remain well supported. The biggest risk to this view is the current challenges regarding the AstraZeneca vaccine, which the UK is very reliant upon to reach their vaccination targets. 2. The Monetary Policy outlook for the BOE From the start of the year the BOE had a change of heart regarding negative interest rates when on the 12th of Jan Governor Bailey pushed back against negative rates, and that view was confirmed in the BOE’s meeting on the 4th of February where they firmly pushed back against negative rates. Even though the BOE is nowhere close to hawkish, their less dovish demeanour regarding the overall economic outlook (and unphased approach to rising yields) have seen markets shifting their monetary policy expectations from expecting the next move to be a 10 bsp cut to now expecting the next move to be a hike of 10 bsp. 3. The country’s economic developments Economic data has been better-than-expected despite renewed lockdown measures that was announced at the end of last year. The hopes of a possible faster economic reopening and subsequent recovery has seen both the BOE and IMF upgrade growth projections for the UK economy which has widened the growth differentials between other majors by quite a bit and is something that should continue to be a supportive factor for GBP.
by thunderpips
GBP: Current Sentiment DriversLatest Developments: April 21 – CPI for March increased to 0.7% Y/Y (prior 0.4%) and printed at 0.3% M/M (prior 0.1%). Core CPI increased to 1.1% Y/Y (prior 0.9%) and printed at 0.4% M/M (prior 0.0%). April 20 – The UK’s coronavirus count increased to 4,393,307 cases (+2,524). March 31 – GDP for Q4 printed at 1.3% Q/Q and -7.3% Y/Y, revised from 1.0% and -7.8%, respectively. The report published by the ONS also noted that household savings for the quarter grew to their biggest ever level. This is supportive of recent comments from the BoE, who expect a significant increase in consumer activity once lockdowns are lifted. March 18 – At their March meeting, the BoE kept its official Bank Rate unchanged at 0.10% and its QE programme at £895 billion. The BoE added that they do not intend to tighten policy until there is clear evidence that there is significant progress towards eliminating spare capacity and achieving its 2% inflation goal. Future Sentiment Shifts: There are several risks to GBP’s outlook, particularly with respect to the UK’s coronavirus/lockdown outlook and interest rate expectations. Of these two, expect the UK’s coronavirus outlook to play the more influential role in the short term as the UK’s coronavirus vaccine rollout continues to show signs of stabilizing its breakout, which in turn, should allow the UK to ease lockdown restrictions in the months ahead. However, in the medium term, as the market’s focus shifts, monetary policy should dominate. Regarding monetary policy, risks still remain; although, further easing appears unlikely at this point and markets looking for a hike in 2022. Primary Drivers: Bank of England – Monetary Policy in the UK remains highly influential to GBP’s fundamental outlook. Expectations for policy tightening should prove GBP positive, while expectations for policy easing should prove GBP negative. Brexit – The outlook for the UK’s exit from the EU in December remains a key influence for GBP as it poses significant risks to the UK’s economic outlook. With the UK set to leave at the end of the year and progress in negotiations between the UK and the EUR significantly hampered by the coronavirus outbreak, risks remain firmly tilted to the downside with a hard Brexit or even no deal Brexit remaining distinct possibilities.
by thunderpips
GBP - FUNDAMENTAL DRIVERS1. Virus Situation. Regarding the UK's coronavirus outlook, this remains encouraging with the UK's vaccine program having administered at least one dose to over half of the UK population. Given the current success of its vaccine program, the UK is now in the early stages of lifting lockdown restrictions. While the UK's coronavirus outlook is improving, we expect GBP to remain well supported. The biggest risk to this view is the current challenges regarding the AstraZeneca vaccine, which the UK is very reliant upon to reach their vaccination targets. 2. The Monetary Policy outlook for the BOE. From the start of the year the BOE had a change of heart regarding negative interest rates when on the 12th of Jan Governor Bailey pushed back against negative rates, and that view was confirmed in the BOE’s meeting on the 4th of February where they firmly pushed back against negative rates. Even though the BOE is nowhere close to hawkish, their less dovish demeanour regarding the overall economic outlook (and unphased approach to rising yields) have seen markets shifting their monetary policy expectations from expecting the next move to be a 10 bsp cut to now expecting the next move to be a hike of 10 bsp. 3. The country’s economic developments. Economic data has been better-than-expected despite renewed lockdown measures that was announced at the end of last year. The hopes of a possible faster economic reopening and subsequent recovery has seen both the BOE and IMF upgrade growth projections for the UK economy which has widened the growth differentials between other majors by quite a bit and is something that should continue to be a supportive factor for GBP.
by thunderpips
GBP: Current Sentiment DriversLatest Developments: April 14 – The UK’s coronavirus count increased to 4,378,304 cases (+2,490). March 31 – GDP for Q4 printed at 1.3% Q/Q and -7.3% Y/Y, revised from 1.0% and -7.8%, respectively. The report published by the ONS also noted that household savings for the quarter grew to their biggest ever level. This is supportive of recent comments from the BoE, who expect a significant increase in consumer activity once lockdowns are lifted. March 24 – CPI for February slowed to 0.4% Y/Y (prior 0.7%) and printed at 0.1% M/M (prior -0.2%). Core CPI slowed to 0.9% Y/Y (prior 1.4%) and printed at 0.0% M/M (prior -0.5%). March 18 – At their March meeting, the BoE kept its official Bank Rate unchanged at 0.10% and its QE programme at £895 billion. The BoE added that they do not intend to tighten policy until there is clear evidence that there is significant progress towards eliminating spare capacity and achieving its 2% inflation goal. February 23 – The Unemployment Rate for December increased to 5.1% from a prior of 5.0%. Employment Change printed at -114K while Average Earnings printed at 4.7% 3M Y/Y. For January, Claimant Count Change printed at -20.0K. Future Sentiment Shifts: There are several risks to GBP’s outlook, particularly with respect to the UK’s coronavirus/lockdown outlook and interest rate expectations. Of these two, expect the UK’s coronavirus outlook to play the more influential role in the short term as the UK’s coronavirus vaccine rollout continues to show signs of stabilizing its breakout, which in turn, should allow the UK to ease lockdown restrictions in the months ahead. However, in the medium term, as the market’s focus shifts, monetary policy should dominate. Regarding monetary policy, risks still remain; although, further easing appears unlikely at this point and markets looking for a hike in 2022. Primary Drivers: Bank of England – Monetary Policy in the UK remains highly influential to GBP’s fundamental outlook. Expectations for policy tightening should prove GBP positive, while expectations for policy easing should prove GBP negative. Brexit – The outlook for the UK’s exit from the EU in December remains a key influence for GBP as it poses significant risks to the UK’s economic outlook. With the UK set to leave at the end of the year and progress in negotiations between the UK and the EUR significantly hampered by the coronavirus outbreak, risks remain firmly tilted to the downside with a hard Brexit or even no deal Brexit remaining distinct possibilities.
by thunderpips
GBP: Current Sentiment DriversLatest Developments: April 12 – The UK’s coronavirus count increased to 4,373,342 cases (+3,567). March 31 – GDP for Q4 printed at 1.3% Q/Q and -7.3% Y/Y, revised from 1.0% and -7.8%, respectively. The report published by the ONS also noted that household savings for the quarter grew to their biggest ever level. This is supportive of recent comments from the BoE, who expect a significant increase in consumer activity once lockdowns are lifted. March 24 – CPI for February slowed to 0.4% Y/Y (prior 0.7%) and printed at 0.1% M/M (prior -0.2%). Core CPI slowed to 0.9% Y/Y (prior 1.4%) and printed at 0.0% M/M (prior -0.5%). March 18 – At their March meeting, the BoE kept its official Bank Rate unchanged at 0.10% and its QE programme at £895 billion. The BoE added that they do not intend to tighten policy until there is clear evidence that there is significant progress towards eliminating spare capacity and achieving its 2% inflation goal. February 23 – The Unemployment Rate for December increased to 5.1% from a prior of 5.0%. Employment Change printed at -114K while Average Earnings printed at 4.7% 3M Y/Y. For January, Claimant Count Change printed at -20.0K. Future Sentiment Shifts: There are several risks to GBP’s outlook, particularly with respect to the UK’s coronavirus/lockdown outlook and interest rate expectations. Of these two, expect the UK’s coronavirus outlook to play the more influential role in the short term as the UK’s coronavirus vaccine rollout continues to show signs of stabilizing its breakout, which in turn, should allow the UK to ease lockdown restrictions in the months ahead. However, in the medium term, as the market’s focus shifts, monetary policy should dominate. Regarding monetary policy, risks still remain; although, further easing appears unlikely at this point and markets looking for a hike in 2022. Primary Drivers: Bank of England – Monetary Policy in the UK remains highly influential to GBP’s fundamental outlook. Expectations for policy tightening should prove GBP positive, while expectations for policy easing should prove GBP negative. Brexit – The outlook for the UK’s exit from the EU in December remains a key influence for GBP as it poses significant risks to the UK’s economic outlook. With the UK set to leave at the end of the year and progress in negotiations between the UK and the EUR significantly hampered by the coronavirus outbreak, risks remain firmly tilted to the downside with a hard Brexit or even no deal Brexit remaining distinct possibilities.
by thunderpips
GBP - FUNDAMENTAL DRIVERS1. Virus Situation Regarding the UK's coronavirus outlook, this remains encouraging with the UK's vaccine program having administered at least one dose to over half of the UK population. Given the current success of its vaccine program, the UK is now in the early stages of lifting lockdown restrictions. While the UK's coronavirus outlook is improving, we expect GBP to remain well supported. The biggest risk to this view is the current challenges regarding the AstraZeneca vaccine, which the UK is very reliant upon to reach their vaccination targets. 2. The Monetary Policy outlook for the BOE From the start of the year the BOE had a change of heart regarding negative interest rates when on the 12th of Jan Governor Bailey pushed back against negative rates, and that view was confirmed in the BOE’s meeting on the 4th of February where they firmly pushed back against negative rates. Even though the BOE is nowhere close to hawkish, their less dovish demeanour regarding the overall economic outlook (and unphased approach to rising yields) have seen markets shifting their monetary policy expectations from expecting the next move to be a 10 bsp cut to now expecting the next move to be a hike of 10 bsp. 3. The country’s economic developments Economic data has been better-than-expected despite renewed lockdown measures that was announced at the end of last year. The hopes of a possible faster economic reopening and subsequent recovery has seen both the BOE and IMF upgrade growth projections for the UK economy which has widened the growth differentials between other majors by quite a bit and is something that should continue to be a supportive factor for GBP.
by thunderpips
GBP: Current Sentiment DriversLatest Developments: April 7 – The UK’s coronavirus count increased to 4,367,291 cases (+2,763). March 31 – GDP for Q4 printed at 1.3% Q/Q and -7.3% Y/Y, revised from 1.0% and -7.8%, respectively. The report published by the ONS also noted that household savings for the quarter grew to their biggest ever level. This is supportive of recent comments from the BoE, who expect a significant increase in consumer activity once lockdowns are lifted. March 24 – CPI for February slowed to 0.4% Y/Y (prior 0.7%) and printed at 0.1% M/M (prior -0.2%). Core CPI slowed to 0.9% Y/Y (prior 1.4%) and printed at 0.0% M/M (prior -0.5%). March 18 – At their March meeting, the BoE kept its official Bank Rate unchanged at 0.10% and its QE programme at £895 billion. The BoE added that they do not intend to tighten policy until there is clear evidence that there is significant progress towards eliminating spare capacity and achieving its 2% inflation goal. February 23 – The Unemployment Rate for December increased to 5.1% from a prior of 5.0%. Employment Change printed at -114K while Average Earnings printed at 4.7% 3M Y/Y. For January, Claimant Count Change printed at -20.0K. Future Sentiment Shifts: There are several risks to GBP’s outlook, particularly with respect to the UK’s coronavirus/lockdown outlook and interest rate expectations. Of these two, expect the UK’s coronavirus outlook to play the more influential role in the short term as the UK’s coronavirus vaccine rollout continues to show signs of stabilizing its breakout, which in turn, should allow the UK to ease lockdown restrictions in the months ahead. However, in the medium term, as the market’s focus shifts, monetary policy should dominate. Regarding monetary policy, risks still remain; although, further easing appears unlikely at this point and markets looking for a hike in 2022. Primary Drivers: Bank of England – Monetary Policy in the UK remains highly influential to GBP’s fundamental outlook. Expectations for policy tightening should prove GBP positive, while expectations for policy easing should prove GBP negative. Brexit – The outlook for the UK’s exit from the EU in December remains a key influence for GBP as it poses significant risks to the UK’s economic outlook. With the UK set to leave at the end of the year and progress in negotiations between the UK and the EUR significantly hampered by the coronavirus outbreak, risks remain firmly tilted to the downside with a hard Brexit or even no deal Brexit remaining distinct possibilities.
by thunderpips
GBP - CENTRAL BANK ANALYSISObjective: Through the Bank of England Act 1998, the responsibility for formulating monetary policy, including the objective of stable prices defined by the government's inflation target of 2.0%, was delegated to the BoE's Monetary Policy Committee (MPC). As of February's report, inflation in the UK stands at 0.4% Y/Y, compared to January's 0.7% Y/Y. Core CPI for the month stands at 0.9%, compared to a prior of 1.4%. Situation: The BoE kept its Official Bank Rate unchanged at their March meeting at 0.10% with a vote split of 0-0-9. The MPC also voted unanimously to keep its Asset Purchase Facility unchanged for a total of £895 billion. At the meeting, the BoE stated that it does not intend to tighten policy until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving its 2% inflation target sustainably. The BoE concluded that its current stance remains appropriate and news of recent plans for lifting restrictions may be consistent with a slightly stronger outlook for consumption growth.
by thunderpips
GBP - BULLISHThe focus for GBP is likely to be firmly fixed on the coronavirus outbreak now that the UK and EU have reached a Brexit agreement. Of course, although the market's focus on Brexit is now likely to markedly fade, the UK and EU's relationship will still remain of importance for GBP. This has been highlighted in recent sessions by the rise in UK/EU tensions over coronavirus vaccine supplies and distribution. Regarding the UK's coronavirus outlook, this remains encouraging with the UK's vaccine program having administered at least one dose to over half of the UK population. Given the current success of its vaccine program, the UK is now in the early stages of lifting lockdown restrictions. While the UK's coronavirus outlook is improving, we expect GBP to remain well supported, resulting in a bullish fundamental outlook.
by thunderpips