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Poundsterling

📈GBPUSD analysis, Weekly insight into price behavior📉FX:GBPUSD OANDA:GBPUSD Hello Traders, please check out my previous ideas. If the Pound stabilizes above the weekly Bollinger midline, the bearish scenario won't be fellfield. In the bearish scenario, the price can fall to the yellow zone. ✌💥If you are satisfied with my analytical content, please share my ideas💥✌ ✍🐱‍👤Otherwise, make sure you leave comments and let me know what you think.🐱‍👤✍ 🤑🍾Thank you for your support. I hope you will gain profit by following my analyses.🍾🤑 CrazyS✌
Short
by CrazyS
2
GBPUSD - AnalysisReexamination & Unsuccessful Attempt at the Daily Resistance Point 1.2620. Monitoring the price thresholds on both the daily and 15-minute charts of GBPUSD. The price has surged back towards the significant daily resistance mark at 1.2620. 1.2620-31 signifies the daily resistance threshold coupled with the 79% Fibonacci retracement level. We are keeping a vigilant eye on the possibility of the price surging and then encountering failure around this intraday resistance zone, which could lead to a subsequent downtrend, with a target set at the daily support level of 1.2544.
Short
by Blackerberg
📈GBPUSD analysis, Weekly insight into price behavior📉FX:GBPUSD FOREXCOM:GBPUSD Hello Traders, please check out my previous ideas. This is my first analysis on GBPUSD daily. If the Pound stabilizes above the yellow zone (crossing the weekly Bollinger midline), the price can climb up to the 1.30 level. In the opposite scenario, if the price does not follow the conditions of the previous scenario, the price can fall to around 1.2626. ✌💥If you are satisfied with my analytical content, please share my ideas💥✌ ✍🐱‍👤Otherwise, make sure you leave comments and let me know what you think.🐱‍👤✍ 🤑🍾Thank you for your support. I hope you will gain profit by following my analyses.🍾🤑 CrazyS✌
Long
by CrazyS
2
GBPUSD July 31st, 2023GBPUSD pair has been on an upward trend since the end of 2022, as indicated by the rising trendline. This trendline acts as a support line, where prices have bounced higher. Since March, a rising wedge pattern has formed, represented by the blue area on the chart. A rising wedge pattern typically signals a potential reversal in the trend. In this case, there was a breakout of the resistance area, to be cautious as the false breakout might still be within a tolerance range, and support breakout confirmation is needed to validate the pattern. Another crucial observation is the trading volume, which has been declining despite the continuous price rise since the end of last year. This lack of interest in trading GBPUSD indicates that many traders find it relatively expensive, leading to reduced participation in the market. Now, let's consider the potential price targets: Target 1: 1.24 This level represents a stable price, and it is likely seen as a significant target, possibly because it is the highest price seen at the beginning of the year. Traders might aim for this level in anticipation of a potential price stabilization or a short-term retracement. Target 2: 1.18 Target 2 represents the lowest price seen at the beginning of the year. If the rising wedge pattern is confirmed and the prices break down below the support provided by the trendline, traders may consider this level as a possible downside target. Target 3: 1.11 This is the last target mentioned and could be another level to watch if the bearish sentiment intensifies. However, it's important to note that this target is quite close to Target 2, and both of these levels may present strong psychological and technical support zones.
Short
by DNP-FX
EUR GBP - FUNDAMENTAL ANALYSISCurrency Markets on UK Recession Watch - There has been high volatility in the Pound to Euro (GBP/EUR) exchange rate during the past week. GBP/EUR posted a fresh 9-month best conversion at 1.1735 early in the week before a slide to below 1.1600 after the Bank of England (BoE) policy decision. Weaker than-expected Euro-Zone data helped strengthen GBP/EUR to 1.1700 on Friday. Both the ECB and Bank of England will want to maintain a hawkish policy stance. Evidence on economic strength is likely to be a key element in the short term. Aggressive BoE Action to Fight Inflation The latest UK inflation data recorded an unchanged headline rate of 8.7% while the core rate increased to 7.1% from 6.8%. The Bank of England (BoE) increased interest rates by 50 basis points to 5.0% this week as it looks to bring inflation under control. The UK 2-year yield has increased to a fresh 15-year high of 5.15%. Following the BoE move, investment banks have raised their rate forecasts. JP Morgan, for example, now expects that rates will be increased to 5.75%. The bank added; “This new policy rate level in our forecast recognizes that there is a dynamic between wage and prices that needs to be stopped and assumes the BoE will need to hike further in order to trigger a significant weakening in the labour market.” High yields will provide an element of support to the Pound, especially with short-term yields comfortably above longer-term rates. According to ING; “From a currency perspective, a sharply inverted yield curve can work as a positive factor for a reserve currency like the pound (as opposed to growth-sensitive currencies). We suspect that a rebound to 0.88 in EUR/GBP(1.1360 for GBP/EUR) will need to be delayed on the back of that.” Commerzbank is still not confident that the BoE has got a grip on inflation. According to the bank; “So the impression remains of a central bank that was too slow in starting to hike its key rate and moved to smaller rate steps too early, even signalling a possible pause. The BoE seems to be chasing inflation developments rather than fighting them with an active monetary policy, which is damaging for Sterling. It added; “As we do not believe that the BoE will suddenly take a different approach, we remain sceptical for Sterling.” UK Economic Fears Liable to Increase The latest UK PMI business confidence data recorded a decline in the manufacturing index to a 6-month low of 46.2 for June from 47.1 previously and below consensus forecasts of 46.8. The services-sector index also retreated to a 3-month low of 53.7 from 55.2 and below expectations of 54.8. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence commented; “while the June survey reveals the economy to be cooling as a result of higher interest rates, the stubbornly elevated price growth in the service sector suggests the Bank of England will consider its fight against inflation as still a work in progress. However, such rate hikes will clearly add further to the likelihood of a recession later in the year, which is looking increasingly inevitable as collateral damage in the fight against inflation.” According to TD Securities; “Rates are reaching a point where they will have a negative impact on growth, which is feeding back into a weaker currency.” The bank expects that the economy will suffer; “We now expect three more 25 bps hikes in Bank Rate, taking it to 5.75% in November. As policy tightening catches up to the real economy, a recession is likely to emerge this winter, with cuts coming in Bank Rate from February 2024.” It adds; “The 50 bps hike plays well into our EUR/GBP topside view, where we could see a push towards the top-end of the recent range back near 0.89 in the months ahead.” (1.1235 for GBP/EUR). Euro-Zone Unease Intensifies The latest Euro-Zone PMI business confidence data recorded a decline in the manufacturing index to a 37-month low of 43.6 for June from 44.8 the previous month and compared with an unchanged reading for the month. The services-sector index also retreated to a 5-month low of 52.4 for the month from 55.1 previously and well below expectations of 54.5. The data will reinforce near-term unease surrounding the Euro-Zone outlook. At this stage, the ECB has maintained a hawkish policy stance and is expecting to increase interest rates further at the July policy meeting. As Euro-Zone inflation declines, it is likely that the real interest rates will increase and potentially move into positive territory. If UK inflation is stubborn, real UK rates will remain low and potentially negative. In this context, Danske Bank notes; “On balance, we continue to see relative rates as a positive for EUR/GBP from here, which is one of several reasons behind our fundamental predisposition of buying EUR/GBP dips. We highlight that whether the aggressive BoE market pricing will subside or inflation continues to surprise, we see it as headwinds for GBP.” It has a 6-month GBP/EUR forecast of 1.1360. Berenberg still has an end-2023 GBP/EUR forecast of 1.1765.
Long
by thunderpips
17
EUR GBP - FUNDAMENTAL ANALYSISCurrency Markets on UK Recession Watch - There has been high volatility in the Pound to Euro (GBP/EUR) exchange rate during the past week. GBP/EUR posted a fresh 9-month best conversion at 1.1735 early in the week before a slide to below 1.1600 after the Bank of England (BoE) policy decision. Weaker than-expected Euro-Zone data helped strengthen GBP/EUR to 1.1700 on Friday. Both the ECB and Bank of England will want to maintain a hawkish policy stance. Evidence on economic strength is likely to be a key element in the short term. Aggressive BoE Action to Fight Inflation The latest UK inflation data recorded an unchanged headline rate of 8.7% while the core rate increased to 7.1% from 6.8%. The Bank of England (BoE) increased interest rates by 50 basis points to 5.0% this week as it looks to bring inflation under control. The UK 2-year yield has increased to a fresh 15-year high of 5.15%. Following the BoE move, investment banks have raised their rate forecasts. JP Morgan, for example, now expects that rates will be increased to 5.75%. The bank added; “This new policy rate level in our forecast recognizes that there is a dynamic between wage and prices that needs to be stopped and assumes the BoE will need to hike further in order to trigger a significant weakening in the labour market.” High yields will provide an element of support to the Pound, especially with short-term yields comfortably above longer-term rates. According to ING; “From a currency perspective, a sharply inverted yield curve can work as a positive factor for a reserve currency like the pound (as opposed to growth-sensitive currencies). We suspect that a rebound to 0.88 in EUR/GBP(1.1360 for GBP/EUR) will need to be delayed on the back of that.” Commerzbank is still not confident that the BoE has got a grip on inflation. According to the bank; “So the impression remains of a central bank that was too slow in starting to hike its key rate and moved to smaller rate steps too early, even signalling a possible pause. The BoE seems to be chasing inflation developments rather than fighting them with an active monetary policy, which is damaging for Sterling. It added; “As we do not believe that the BoE will suddenly take a different approach, we remain sceptical for Sterling.” UK Economic Fears Liable to Increase The latest UK PMI business confidence data recorded a decline in the manufacturing index to a 6-month low of 46.2 for June from 47.1 previously and below consensus forecasts of 46.8. The services-sector index also retreated to a 3-month low of 53.7 from 55.2 and below expectations of 54.8. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence commented; “while the June survey reveals the economy to be cooling as a result of higher interest rates, the stubbornly elevated price growth in the service sector suggests the Bank of England will consider its fight against inflation as still a work in progress. However, such rate hikes will clearly add further to the likelihood of a recession later in the year, which is looking increasingly inevitable as collateral damage in the fight against inflation.” According to TD Securities; “Rates are reaching a point where they will have a negative impact on growth, which is feeding back into a weaker currency.” The bank expects that the economy will suffer; “We now expect three more 25 bps hikes in Bank Rate, taking it to 5.75% in November. As policy tightening catches up to the real economy, a recession is likely to emerge this winter, with cuts coming in Bank Rate from February 2024.” It adds; “The 50 bps hike plays well into our EUR/GBP topside view, where we could see a push towards the top-end of the recent range back near 0.89 in the months ahead.” (1.1235 for GBP/EUR). Euro-Zone Unease Intensifies The latest Euro-Zone PMI business confidence data recorded a decline in the manufacturing index to a 37-month low of 43.6 for June from 44.8 the previous month and compared with an unchanged reading for the month. The services-sector index also retreated to a 5-month low of 52.4 for the month from 55.1 previously and well below expectations of 54.5. The data will reinforce near-term unease surrounding the Euro-Zone outlook. At this stage, the ECB has maintained a hawkish policy stance and is expecting to increase interest rates further at the July policy meeting. As Euro-Zone inflation declines, it is likely that the real interest rates will increase and potentially move into positive territory. If UK inflation is stubborn, real UK rates will remain low and potentially negative. In this context, Danske Bank notes; “On balance, we continue to see relative rates as a positive for EUR/GBP from here, which is one of several reasons behind our fundamental predisposition of buying EUR/GBP dips. We highlight that whether the aggressive BoE market pricing will subside or inflation continues to surprise, we see it as headwinds for GBP.” It has a 6-month GBP/EUR forecast of 1.1360. Berenberg still has an end-2023 GBP/EUR forecast of 1.1765.
Long
by thunderpips
7
EUR GBP - FUNDAMENTAL ANALYSISBNP Paribas 2023-2024 Exchange Rate Forecasts Euro Can Secure Capital Inflows The bank maintains a broadly constructive stance towards the Euro. It expects that the ECB rate hikes and quantitative tightening will encourage foreign inflows and domestic repatriation. Although BNP expects that energy prices will strengthen, it does not expect a return to 2021 levels. Overall, the bank expects gradual EUR/USD gains over the medium term. Pound Vulnerable on Weak UK Fundamentals BNP expects that the Bank of England (BoE) will have to increase interest rates further, but does not consider that market expectations of rate hikes to 5.75% will be met which will sap currency support. It also considers that the BoE is in a no-win situation. Even if the central bank continues to raise rates, BNP also expects that market confidence in Sterling would suffer to the perception of a long-term inflation problem. It adds; “Both of these developments would be GBP-negative, in our view.” The bank also maintains a negative stance on UK fundamentals. It adds; “We expect GBP to remain structurally weak due to UK growth underperforming its peers, remaining below-trend, and its persistent current-account deficit that requires foreign funding.” Overall, BNP expects that the Euro to Pound (EUR/GBP) exchange rate will trade close to 0.88 during the forecast period.
Long
by thunderpips
3
GBPUSD Approaching the weekly trend ahead of CPI data.Dear Traders, I'd like to bring your attention to the current market conditions of GBPUSD. It is currently experiencing a downtrend but is undergoing a correction phase. The price is approaching a significant resistance zone at 1.26100, which coincides with the major trend. This area is worth monitoring closely. In addition, it's crucial to take into account the upcoming Consumer Price Index (CPI) release this week. This economic indicator is expected to have a substantial impact on the strength of the US dollar and may provide insights into the future actions of Fed Chair Powell. If the CPI figures are higher than anticipated, it suggests that the Fed may need to continue raising interest rates, which could strengthen the dollar further. On the other hand, if the CPI falls below expectations, it is more likely that the Fed will postpone any rate hikes in their next monetary policy decision. Remember to prioritize risk management and trade with caution. Best regards, Joe
Short
by JoeChampion
43
EUR GBP - FUNDAMENTAL ANALYSIS2023-2024 Exchange Rate Forecasts From MUFG Pound Sterling: BoE Forecasting Errors Increase GBP Risk Profile MUFG has significant reservations surrounding the Pound outlook. As far as inflation is concerned, it sees significant risks over the medium-term implications. It notes; “The sense that the UK has a bigger inflation problem is creating downside risks for the pound that may see a period of underperformance if the evidence continues to suggest this.” MUFG also notes problems with the bank’s model failure to forecast higher inflation. According to the bank; “BoE Governor Bailey stated that it was no longer following the information from the model which will only exacerbate risks of policy errors and the potential for a bigger inflation problem in the UK.” Overall, MUFG expects a mixed outlook for the Pound, especially as it expects UK yields will decline amid weak credit demand and evidence of weaker employment. It expects the downgrading of BoE rate expectations will hurt the Pound against the Euro with EUR/GBP forecast at 0.90 in 12 months.
Long
by thunderpips
6
GBP - 1.24 Lower Next?!GBP - 1.24 Next?! CME:6B1! FX:GBPUSD GBPUSD - 1.24 Next! We've had a great run, I'd still be buying longer term dips on GBP - However, for now I feel a pull back is due and this is great opportunity for us traders to take opportunities of the bull and bear side! Overall pattern, wedge - We've broken to down side the first area of interest to me is 1.24/ 1.23 high areas and the next would be 1.22 areas! If we are to close above 1.25 i'd be re thinking this plan... Trade Journal (Not Financial Advice)
CME:6B1!
by Trade_Journal
3
GBP USD - FUNDAMENTAL ANALYSISThe US dollar (USD) has staged a comeback against the Pound Sterling (GBP) and Euro (EUR) over the past few weeks, but foreign exchange analysts at MUFG still consider that medium-term depreciation is the most likely outcome. The bank considers that the US Dollar exchange rates are overvalued, especially against the Japanese Yen (JPY) and net capital flows are likely to be less supportive. It also considers that the Euro-Zone and Chinese outlooks are more favourable, especially given that gas prices have declined sharply. MUFG also expects the Fed will cut rates before the ECB while the Bank of Japan will tighten policy. Monetary policy will inevitably be a key aspect. Although the immediate debate is still surrounding the potential for further interest rate hikes, MUFG expects the debate will switch to the potential for a Federal Reserve policy reversal as the US economy deteriorates. According to the bank; “ The Fed will be cutting rates prior to the ECB. Inflation in Europe is stickier due to energy and food prices and the Fed will have much more scope to respond once economic conditions in the US weaken further from here. ” After an extended period of quantitative easing, MUFG also expects that the ECB quantitative tightening programme through bond sales will put upward pressure on longer-term yields and support the Euro. Global Growth Trends Still Favourable MUFG notes that previous forecasts of an extended UK recession have been revised away and the Euro-Zone has also been resilient. As far as China is concerned it adds; “ Recent data has disappointed, in particular on the manufacturing side of the economy, but pent-up domestic demand likely has further to run which will act as a source of global growth this year. ” Although market sentiment has been more cautious, it expects overall growth dynamics will not favour the US dollar as Asia rebounds. A related issue is the key area of energy prices. The jump in energy costs last year was a key reason why agencies such as the IMF and central banks were so negative surrounding the European economic outlook last year. Gas prices have, however, declined sharply with a slump from over 90% from the peak and close to 2-year lows. Gas storage levels are also at very high levels in historic terms ang MUFG expects storage levels will hit 100% in the summer. In this context, lower gas prices will improve the growth outlook and strengthen the trade outlook. The Bank of Japan has resisted tightening monetary policy, but MUFG notes that the economy is strengthening and inflation has increased. According to MUFG; “ we maintain that YCC has passed its sell-by-date and while it remains unclear whether price stability at 2% can be achieved, the BoJ will still move to widen the band or scrap it completely. ” The bank expects that the yen will strengthen sharply if the Bank of Japan lets yields increase which will drag the dollar lower. Negative Long-Term US Debt Dynamics The immediate focus is on the US debt ceiling and political brinkmanship ahead of early June when the US Treasury will run out of cash. These short-term dynamics are mixed for the US dollar with concerns over the economy, but potential defensive support if risk appetite deteriorates. MUFG focusses on the underlying debt dynamics and the potentially unsustainable situation. MUFG notes that the budget deficit in the first seven months of fiscal 2022/23 amounted to $928bn from $360bn the previous year. On a longer-term view, in considers the debt dynamics will be potentially negative for the US currency. De-Dollarization Hype Although MUFG considers that the de-dollarization rhetoric is rather more hype than substance, there is still the risk that long-term confidence in the dollar will decline with scope for some further increase in Euro and yuan central bank reserve holdings. MUFG also notes that there has been strong central bank gold buying and it expects this trend will continue. The bank also sees a risk that the US use of financial sanctions will discourage official players to hold reserves in the dollar due to fears over asset freezes. MUFG notes that there has been an extended period of Wall Street out-performance, but expects this trend will reverse and net capital flows will be less supportive for the US currency. It adds; “ We see a renewed drop in US equities as investors position more assertively for US recession. ” Japan’s Nikkei 225 index has posted a 32-year high and the German DAX index has hit a record high. It also sees scope for a sustained rebound in emerging-market equities after an extended period of under-performance. It adds; “ A reversal of the current period of deep EM undervaluation poses downside risks for the USD in the medium-term. ” Long-Term Peak, Dollar Overvalued MUFG notes that the dollar last year reached the highest level for over 20 years. It also notes that at the October peak the currency index was 2 standard deviations stronger than the average over the past 40 years. It adds; “ Similar extreme levels of USD overvaluation were last recorded in the early 2000’s and mid-1980’s and subsequently proved to be long-term bearish turning points for the USD. ” The bank also considers that the dollar is substantially overvalued, especially against the yen, increasing the likelihood of mean reversion.
Long
by thunderpips
2
GBP USD - FUNDAMENTAL ANALYSISIn a fresh look at the outlook for the Pound to Dollar (GBP/USD) exchange rate, Jane Foley, Senior FX Strategist at Rabobank, draws attention to a potential slide for the sterling. "We see scope for cable to drop to 1.22 on a 3-month view," says Foley, Senior FX Strategist at Rabobank. This outlook indicates a drop in the value of the pound against the dollar by more than one per cent from its current position. The basis of this outlook, according to Foley, appears to be linked to market positioning and the capability of both the pound and the euro to handle impending disappointing economic data. The narrative surrounding these factors suggests a period of increased volatility for the pound, especially against its major counterparts. A surge in gilt yields and revived anxieties around UK's fiscal management have the potential to disrupt Pound Sterling (GBP)'s recent strength against the US dollar (USD), according to the analyst. This is in light of market expectations of additional Bank of England (BoE) rate hikes, which have failed to solidify GBP/USD's initial gains against major currencies. "Yesterday’s headlines that gilt yields had soared back towards the levels hit after the disastrous mini-budget last September was unsettling for investors and for the pound," says Foley. Further, despite market expectations of BoE rate hikes, "the Pound failed to hold initial gains against either the USD or the EUR," Foley adds. Q1 Performance and Market Positioning of the Sterling In terms of the sterling's performance, the currency had a strong showing in the first quarter. Data from this period suggested that the UK economy was outperforming expectations, earning the sterling the title of the best-performing G10 currency. Despite these positive indicators, Foley posits that the UK's growth outlook remains far from robust. "The Pound was the best performing G10 currency in Q1 as a stream of UK data suggested that the economy was performing better than expected," says Foley. However, Foley points out that, "The UK growth outlook is still far from strong." Market positioning towards the sterling has shown a shift in Q1. Speculators have moved from short GBP positions to net long GBP positions. However, recent data showing stronger-than-expected UK CPI inflation has reintroduced fears of a potential recession. BoE Policy and the Potential of a UK Recession Looking ahead, the BoE's policy decisions might bear heavily on the GBP/USD exchange rate. The possibility of the BoE raising the Bank rate to 5.0% or even higher is under consideration. This raises a serious question: would the BoE need to push the UK economy into recession to restore CPI inflation to its 2% target? "The risk that the BoE will have to raise the Bank rate to 5.0% or maybe higher has clearly increased," says Foley. She goes on to add, "The first is whether the Bank will have to push the UK economy into recession to restore CPI inflation to its 2% target." Impact of Brexit on the Pound Sterling The long-term implications of Brexit are also critical to understanding Pound Sterling's position. The UK's high inflation rate, which is the highest in the G7, alongside other fundamental weaknesses, have caused some to question whether these issues stem from the aftermath of Brexit. "The UK has the highest inflation rate in the G7, a soft growth outlook, a weak record on investment and productivity growth in recent years," Foley points out. She continues, "Inevitably, this has raised questions about how much of this is related to Brexit." Moreover, the sterling's decline to its pre-2016 Brexit referendum levels appears to have impacted price levels in recent years, with changes in post-Brexit trading arrangements possibly causing further economic turbulence. "GBP has never returned to its pre-2016 Brexit referendum levels which likely had had an impact of the price level in recent years," says Foley. UK’s Economic Sensitivities and Recession Risks The UK's particular economic sensitivities may also be playing a role in the inflation scenario. For instance, the UK's high dependency on gas and small agricultural sector could increase its sensitivity to energy crises and food supply shortages. "The UK has little gas storage and a high level of dependency on gas which would have raised its sensitivity to last year’s energy crisis. It also has a very small agricultural sector which has likely increased its sensitivity to supply shortages of food," Foley highlights. These factors, coupled with the risk of higher interest rates, brings the possibility of recession back into focus. According to Foley, speculators who took long GBP positions recently may have acted hastily, considering these lingering threats. "Either way the risk of higher interest rates means that recession risks are back in the sights, just as forecasters such as the IMF had indicated that the UK would avoid this scenario this year," Foley mentions. Comparatively, Kit Juckes, Global Head of FX Strategy at Société Générale Juckes expects depreciation of Pound Sterling (GBP) given the UK's high current account deficit and the global interest rate environment. On the other hand, Shaun Osborne, Chief FX Strategist at Scotiabank envisages Pound Sterling (GBP) potentially benefiting from higher yields in the short term, but warns of a probable depreciation due to the UK's fundamental weaknesses.
Long
by thunderpips
1