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Pound steady as retail sales reboundUK retail sales rebounded in January, with a gain of 1.9% m/m, its highest monthly gain since April 2021. The increase followed a decline of 4.0% in December and beat the consensus of 1.0%. The Omicron variant of corona continues to have a significant impact on consumer spending. The December drop was a result of consumers doing their Christmas shopping in October and November, while the January rise reflected the easing of health restrictions. With Covid regulations set to expire due to falling infection rates, we should see consumer spending continue to accelerate. The Bank of England remains under strong pressure to raise rates at its meeting in March. The markets have priced in a quarter-point hike in March at 100%, and the BoE will likely follow up with more hikes until inflation, which is at a 30-year high, is brought down. We can expect the BoE to deliver a more gradual pace of rate hikes than what has been priced by the markets. The Russia/Ukraine border remains extremely tense, although a feared invasion on Wednesday did not materialize. Tensions heightened on Thursday after a skirmish in a border region which the West feared was a pretext for a full-scale invasion. This sent the financial markets tumbling as risk sentiment dissipated. The US has disputed Russia's claim that it has reduced its forces on the border and says an invasion could occur at any time. Still, there is a ray of light for a diplomatic solution, as the US and Russian foreign ministers will meet next week, so an invasion appears to be on ice, at least for now. It's a safe bet that market direction next week will be largely set by developments in the Ukraine crisis and market participants should be prepared for volatility. There is resistance at 1.3640. and 1.3719 GBP/USD has support at 1.3487 and 1.3413 .
by OANDA
GBP/USD - Can it break 1.37?The next week could be really interesting for cable, with the Fed and BoE being among the two most aggressive central banks and inflation in both countries continuing to rise rapidly. The pair ran into resistance last month around 1.37, where the 200/233-day SMA band crossed the 50 fib level to provide a considerable barrier of resistance. It's been on the rise again over the last couple of weeks but the past five days has seen more volatility than direction. Both countries are seeing high inflation and five or six rate hikes are already priced in for the central banks. The question is how much further it can go? The recent trend has been bullish and if that continues, 1.37 will once again be key for the same reasons. A move above here would be extremely bullish, with the next test coming around 1.3834 - prior high and 61.8 fib level. Equally, a rotation lower could also send a strong signal, especially coming ahead of the previous high.
by OANDA
Will Euro Reverse Against the British Pound Post ECB and BoE?Following a surprise hawkish pivot by the European Central Bank as the Bank of England raised rates to 0.50% from 0.25%, EUR/GBP rallied the most since April 2021 this week. With markets already pricing in an aggressive BoE, that may leave room for equivalent ECB bets to catch up ahead. That could leave EUR/GBP tilted higher. The pair also closed at the highest since late December, reinforcing the key 0.8277 - 0.8364 support zone that has been in play since 2016. Even though EUR/GBP has been aiming lower since 2020, a closer look reveals that the pair has been consolidating for over 5 years. This has created a large rectangle where the ceiling lays around 0.9270 - 0.9499. The latest bounce off the floor of the rectangle may open the door to extending gains given confirmation. That would prolong the pair's long-term range-bound trend. Immediate resistance appears to be the 78.6% Fibonacci retracement at 0.8538 before a potential falling trendline from 2020 may come into play. On the flip side, a close under the rectangle floor, with confirmation, may hint at ending consolidating, leaving the pair at risk of extending losses. FX_IDC:EURGBP
by QM_Dubrovsky
Sterling yawns after BoE hikeThe British pound is slightly lower in Friday trading. It has been an excellent week for GBP/USD, which has gained 1.26%. If the pound can maintain these gains during the day, it will mark the currency's best weekly showing since December 2020. As was widely predicted, the BoE raised rates by 0.25% at Thursday's meeting. This brings the key rate 0.50% and was the first back-to-back rate hike since 2004. This didn't make much of an impression on the markets, as the pound rose only slightly after the meeting. What was surprising about the decision was that four of the nine MPC members voted to raise rates by 0.50%, which would have marked the biggest rate hike by the BoE in over 25 years. The large minority shows just how hawkish the BoE has become in recent months. Governor Andrew Bailey stated that the markets should not assume that the BoE planned a series of rate hikes, but it's questionable whether investors will pay close attention to his message. Bailey has a credibility problem after surprising the markets with his rate decisions late last year, and the tight 5-4 vote at the meeting shows significant dissension with regard to BoE monetary policy. The US nonfarm payroll report will be released later today. The report is often the highlight of the trading week, but this time around the markets are more focused on interest rate guidance and next week's US inflation report. The ADP employment report showed a massive loss of jobs, at -301 thousand. This was the sharpest decline since April 2020, when the Covid pandemic started. The markets aren't bracing for a repeat from the NFP, but expectations are low, with a consensus of 150 thousand. GBP/USD faces resistance at 1.3648 and 1.3740 There is support at 1.3522 and 1.3440
by OANDA
GBP/CAD - Jumps as BoC resists raising ratesThe pound has been range-bound against the Canadian dollar for the last week and that remains the case so far today, despite the Bank of Canada holding off on raising interest rates. It had been expected to start the tightening cycle today, with the market's pricing in up to five more over the course of the year after inflation hit a 30-year high and the labour market improved. But with the central bank taking a more patient approach and instead laying the foundations to raise rates in March, once it has a better idea of the Fed's plans, no doubt, the currency has come under some pressure. And expectations for that sixth hike in 2022 have dipped, with it now deemed a coin toss in December. Still a very aggressive start to monetary tightening, of course. As far as the chart is concerned, this still leaves the pair range-bound for now, with the upper end holding firm after the decision. It will now be interesting to see which end fails first, with the BoE also in the business of raising rates, after getting underway in December, with another widely expected next week. A move higher could see the pair quickly run into some resistance around 1.71, where prior support and resistance coincides with the upper end of the SMA bands on the 4-hour chart. A move below the 50 fib, and the range support, could be quite bearish, with support perhaps being seen around 1.6850 and 1.6725-1.6735.
by OANDA
EURGBP Long Idea EURGBP has been in a consistent downtrend since the 8th of December, falling from 0.86. area to the current levels of 0.834. The price has been making lower lows, edging ever so slowly to Feb 06's low of 0.8278. However, it appears that EURGBP has found some support at the current levels, with a retest of 0.838 on the cards. Our in-house view on EURGBP is long on a short-term bias, the RSI indicators on the Daily and 1hr are in oversold conditions which comply with our long bias.
Long
by Orion-Markets
GBPUSD is poised for a breakout GBPUSD is poised for a breakout if BOE sounded hawkish tomorrow. - The Bank’s Monetary Policy Committee meets tomorrow to decide what to do on borrowing costs, which remain at record lows of 0.1%. - If BOE hinted that it may raise rates in first half of 2022, specially after the inflation hit 10 year high in NOV - Inflation at 10-year high puts fresh pressure on the Bank of England - wait for a breakout to buy GBPUSD - place your stop loss at 1.3150
Long
by ChartDepth
EUR/GBP - Key Support HoldingWith both the ECB and BoE meetings now behind us, how do we assess the impact on the currencies and what it means going forward? Interestingly, there were no major surprises on either side. The BoE moved slightly earlier while the ECB tweaked its asset purchases, with the result being that the PEPP comes to an end in March while the support it provided is only slowly phased out over an additional six months. In terms of the technicals, there may also be some interesting takeaways. The spike lower yesterday saw the pair run into support around the 61.8 fib (4-hour chart) before quickly recovering to sit back above the 50 fib and 200/233-period SMA band. This had been key support prior to the meetings and remains so now. If 0.85 holds, it could potentially be a very bullish signal going into the new year. Another failure and the long-term downtrend may continue.
by OANDA
Today’s Notable Sentiment ShiftsGBP/BoE – Sterling jumped to December highs on Thursday after the Bank of England surprised investors by hiking interest rates by 15 basis points, taking the Official Bank Rate to 0.25%, with only Tenreyro dissenting in a vote split of 8-0-1. Commenting on the BoE’s decision, Berenberg noted that “having first guided markets into betting on a rate hike in November, the Bank of England today defied market expectations again by finally pulling the trigger. We expect a further 25 basis point hike in February 2022 to take the bank rate to 0.5%.” Meanwhile, IG added that “the announcement does look like a bit of a panic move – the Bank of England is probably regretting its decision not to move last month when Omicron wasn’t even an issue.” EUR/ECB – The ECB kept interest rates on hold at their December meeting but did announce the end of its pandemic emergency asset-buying scheme, with the central bank looking to begin tapering from March onwards. However, the ECB also promised support as needed via its long-running Asset Purchase Programme, confirmed its relaxed view on inflation, and signaled that any exit from years of ultra-easy policy would be slow.
by thunderpips
10
GBPNZD Long IdeaGBPNZD has just seen a small sell-off towards the levels of 1.9495 however it appears that there has been some support formed here. If the BoE decides to raise interest rates then it's likely for GBPNZD to push forward and test the previous high of 1.97. As the Fed plans more rate hikes in 2022 it's possible for the UK to follow suit, which is why I'm bullish on pound pairs approaching the end of the week. The stop-loss area for this trade is located just below the bottom of the range at 1.93658.
Long
by Orion-Markets
GBPCHF Long IdeaFollowing on from Tuesday's successful GBP CHF analysis, I believe that GBPCHF will re-test the 1.24 levels ahead of the UK's interest rate decision at 1:30 today. Across the pond, the Fed's policy decision regarding a faster taper surged the dollar and indices across the board. It's very likely for the BoE to follow in the Feds path in rising interest rates, if this is the case then Sterling Pairs are likely to surge. If the BoE decides not to increase inflation then this trade could go the other way. However, the price has just broken past the 1.226 resistance zone which provides me with confidence in the direction of this position.
Long
by Orion-Markets
GBP/JPY - Big Test Above We've seen a bit of a recovery in GBPJPY over the last couple of weeks as risk appetite has rebounded in the markets. But how much further can it run? What's helped the move more recently is improving odds on a BoE rate hike on Thursday. It's still widely expected that the MPC will vote against hiking this time and then do so in February when they have a much clearer view on omicron and the economy, but it's now expected to be much closer. A hike could propel the pound higher in the near term and put key resistance under significant pressure. The big test above is 152.50, where the 61.8 fib coincides with recent support, the upper end of the 200/233-day SMA, and the lower end of the 55/89-day SMA. A rotation off here could be a very bearish signal as it would confirm the initial break into bearish territory and suggest the recent correction is just that rather than something more significant. It wouldn't be the first time that the BoE has put off raising rates, despite leading us to believe otherwise. I don't think that would be the case this time though. Rather, they could hike in order to follow through on those warnings and once again catch the market a little off-guard. Either way, with the BoE and BoJ rate decisions to come, among many others, the next couple of days will be action-packed which could bring plenty of volatility.
by OANDA
EUR/GBP - Rally Stalls But Breakout Still PossibleThe euro has been on an impressive run against the pound recently and as you'd expect, the rally stalled around the 200/233-day SMA band. But it may not be over yet. The pair was always likely to see significant resistance here, having done so in the past, but the important thing is what follows next. It's worth noting that the Bank of England and European Central Bank will both announce their latest interest rate decisions on Wednesday, with the latter also providing new economic forecasts and perhaps some insight into what, if anything, will replace the PEPP program in March. This will surely have a huge role to play on where the pair breaks next. With the pair pulling back, the key test below is 0.85, where the December lows coincide with the 50 fib level - November lows to December highs - and the 200/233-period SMA band on the 4-hour chart. A move below here could tip momentum back in the favour of the sellers and see the pair resume its long-term downward trend. If this level holds, we could see another run at last week's highs, and, who knows, the pair could be heading into the new year on a much more bullish note.
by OANDA
1
GBPUSD LONG TO 1.34300GBPUSD has been on a decline for the best part of a year. Bearish momentum has majorly decreased and we have pretty much been ranging for about a month now creating a corrective pattern inside a wedge. I am expecting one final wave (Wave E) down towards the order block of 1.31300-1.31070, before we see a reversal to the upside. I will be looking for a 300 PIP bullish move targeting 1.34300, possibly even higher. I will be catching this move on behalf of myself & my Account Management investors.
Long
by BA_Investments
1
EURGBP: Support break can lead to further losses!EURGBP as seen has likely rejected the long term descending daily trendline and now has eyes to move lower. To confirm this move, the daily candle needs to close below 0.84900 support which would open the door to further drop towards the next support located at 0.83800. The stop loss can ideally be placed above the long term daily descending trendline to achieve 1:1 RISK TO REWARD RATIO. My analysis is not meant to be a trading signal nor financial advice! Its highly advisable to perform your own analysis and trade markets at your own risk. Please LIKE & FOLLOW if you found this analysis helpful in assisting with your own personal analysis. Cheers
Short
by FX618Analysis
EURGBP Long Idea EURGBP has been in an uptrend since late November, just about reaching the 0.86 level. Since the retest of 0.86 the price has fallen by 1%, however, it appears to have just formed support around the 0.85 area. The RSI indicator suggests that the price may rise from here as the levels are extremely oversold, (2). The target of this trade is at the recent near high of 0.86. The stop loss area for this trade is located just below the resistance level of 0.848, at 0.8474.
Long
by Orion-Markets
Pound yawns after data dumpThe British pound has had a rather sleepy week, and the lack of activity has continued in Friday trade, as GBP/USD is hovering at the 1.32 line. It has been a light calendar week for the UK, and today's data dump didn't have any effect on the drifting pound. The GDP report for September came in at 4.6% y/y, well short of the consensus of 6.6%. Manufacturing Production for September y/y slowed to 1.3%, shy of the forecast of 1.7%. Investors shrugged off the underperforming data, perhaps because they are more focused on two burning issues, Omicron and the BoE rate decision next week. Omicron has caused some roller-coaster movement in the financial markets. There was a panic in late November, but risk sentiment than rebounded on reports that the variant was less severe than Delta. The World Health Organisation has said that it will have more data on Omicron in a couple of weeks. Although the symptoms appear to be relatively mild, Omicron is up to four times more contagious than Delta, and that has governments worried. The UK has responded by implementing 'Plan B', which includes some health restrictions, such as wearing masks at public venues. Omicron is spreading quickly across the UK, and it's unclear if Plan B will be enough to control the pandemic. The new health restrictions will likely cut into December/January holiday shopping and stoke inflation, as many shops will raise prices. We can expect a downgrade to Q1 2022 growth forecasts, and the wobbly pound will likely face further headwinds in the New Year. The BoE holds its policy meeting next week, and whether the bank will press the rate trigger remains up in the air. The markets have priced in a 40% likelihood of a rate hike, making this a live meeting which could have a strong impact on the struggling British pound. The Omicron crisis has dampened the likelihood of a rate hike, and it was noteworthy that Michael Saunders, a hawkish member of the MPC, has stated that it may be prudent to hold off until we have more data about Omicron. If the markets have learned anything from last month's shocker, when the BoE didn't raise rates, it is not to make any assumptions when it comes to Andrew Bailey & Company. GBP/USD has support at 1.3161 and 1.3091 There is resistance at 1.3336 and 1.3441
by OANDA
2