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GBPCAD: Running out of steam, start of the reversal?In my opinion GBP is building up for a big fall this year, and it has to start with a lower high. Oil prices are rising, and as much as the FED don't want this, it's happening, and this should be good for CAD. I can see a rising wedge pattern, we can see spinning tops forming and it looks like we're running out of steam, I believe we'll initially fall back to the 1.7 support / round number. I'm waiting for my entry, I expected GBP to fall before now, but the BoC unemployment news wasn't supportive last week.
Short
by Finchcliffe
7
GBPUSD: The beginning of the end?I'm expecting full on GBP weakness over the coming weeks, regardless of what happens with the dollar. We've broken below the months of ascending trendline and so far failed to break back above, we have a beautiful bearish engulfing candle on the 4hr close from Friday. I get this pair wrong a lot (because I live in the UK and can see a car crash happening in slow motion...), so will definitely not be jumping in. We have big US CPI data on Thursday at 13.30 GMT, if inflation figures are worse (lower) than forecast then this will be good for the GBP in the short term - however I'm thinking that the best will happen is a failed retest of the trendline and I'm thinking we're starting the move back down - just deserts for how the BoE have performed imho.
Short
by Finchcliffe
GBPJPY: Breakout, Retest, Down...In my recent ideas I’ve noted JPY strength resuming and this is evident in the performance last week, and we can see this when looking at the JPYWCU chart which is like DXY for the Yen. We can see what could be a higher low forming and a fourth retest of the resistance around 0.005350 which could break. We’ve seen out-performance of the Yen against many crosses in the past week, which has generated good pips, it’s too early to suggest a strong recovery (especially as BoJ clearly want a weaker currency to support exports), however they have an economy that when recessions start to hit, I believe they’ll fair better. All crosses against yens are at their high points, this doesn’t mean they can’t go higher, but money flows and I believe the shift is starting. I’m expecting GBP weakness over the coming weeks due to high inflation and massive threat of recession, and definitely this week against the Yen, so looking for shorts around 181.4. First target will be 167 area.
Short
by Finchcliffe
British pound under pressure ahead of Bank of England decisionThe British pound is slightly lower on Thursday. In the European session, GBP/USD is trading at 1.2685, down 0.19%. The pound has been struggling and is down 1.26% this week. The Bank of England meets later today and policy makers have a tough decision on their hands. Will they raise rates by 25 basis points or be more aggressive and deliver a 50-bp hike? The BoE has raised rates 13 consecutive times since December 2021 and is widely expected to continue hiking at today's meeting. The money markets have priced in a 25-bp increase at 62%, with a 38% chance of a 50-bp hike. That means the meeting is live and we could see some volatility from the pound following the rate announcement. The BoE's decision may well depend on whether inflation is moving downwards fast enough. Headline CPI fell to 7.9% in June, down from 8.7%. Core CPI has been stickier and was unchanged in June at 6.9%. The BoE is well aware that its tightening is causing plenty of pain for consumers, but inflation remains public enemy number one, and there is a great deal of distance before inflation is brought down closer to the 2% target. Can the BoE afford to raise by just 25-bp or is a second consecutive hike of 50-bp needed? The BoE has played its cards close to the chest and that is likely the reason we are seeing the split amongst investors as to how high a raise we'll see later today. There is resistance at 1.2744 and 1.2870  1.2637 and 1.2511 are providing support
by OANDA
GBP/USD edges lower ahead of UK inflationThe British pound has edged lower on Tuesday. In the North American session, GBP/USD is trading at 1.3038, down 0.27%. The UK is lagging behind other major economies in the fight to curb inflation. Will Wednesday's inflation report bring some good news? In May, CPI remained stuck at 8.7% y/y but is expected to ease to 8.2% in June. The core rate is expected to remain steady at 7.1%. On a monthly basis, headline CPI is expected to fall from 0.7% to 0.4% and the core rate is projected to slow to 0.4%, down from 0.8%. The inflation report could be a game-changer with regard to the Bank of  England's meeting on August 3rd. The BoE delivered an oversize 50-basis point hike in June and will have to decide between a modest 25-bp hike or another 50-bp increase at the August meeting. Last week's employment report pointed to wage growth picking up, which moved the dial in favour of a 50-bp increase. US retail sales for June provided a mixed spending picture. Headline retail sales rose just 0.2% m/m, below the 0.5% consensus estimate and the upwardly revised May reading of 0.5%. Core retail sales were much stronger at 0.6%, above the 0.3% consensus and the upwardly revised May release of 0.3%. The data points to resilience in consumer spending although momentum has slowed. The retail sales report did not change expectations with regard to rate policy, with the Fed expected to raise rates in July and take a pause in September. The Fed has tightened by some 500 basis points in the current rate-hike cycle and this has curbed inflation, which has fallen to 3%. Nevertheless, the Fed remains concerned that the solid US economy and a tight labour market will make it difficult to hit the 2% inflation target, and the Fed hasn't given any hints that it will wrap up its tightening in July, although the money markets appear to think this is the case. GBP/USD has support at 1.2995 and 1.2906 There is resistance at 1.3077 and 1.3116
by OANDA
1
GBP/USD eyes UK employment reportThe British pound has drifted lower on Monday. GBP/USD is trading at 1.2827 in the European session, down 0.09%. The UK labour market remains resilient despite a cooling economy and high interest rates. Tuesday's June jobs report is expected to show strong numbers. The economy is expected to produce 158,000 jobs in June, after a banner reading of 250,000 in May. The unemployment rate is projected to remain at a low 3.8% and unemployment claims are expected to continue declining. Wage growth is expected to rise to 6.8%, up from 6.5%. That sounds like great news, but not when you're the Bank of England and need the labour market to show some cracks and wage growth to slow down. A tight labor market and strong wage growth have hampered efforts by the central bank to lower inflation and the OECD said last week that the UK was the only major economy where inflation is still rising. The May inflation report was a disappointment, with headline inflation remaining at 8.7% and the core rate rising from 6.8% to 7.1%. BoE Governor Bailey will likely comment on the job numbers and investors will be looking for clues about the BoE's plans at the August 3rd meeting. The BoE has raised rates to 5.0%, but more tightening will be needed in order to curb inflation and the money markets have fully priced in a peak rate of 6.5% by February. The US dollar was broadly lower against the major currencies on Friday, after nonfarm payrolls slid to 209,000, below from the downwardly revised reading of 306,000 in May but not far from the 225,000 consensus estimate. The downturn may have surprised many investors who were caught up in the hype of a massive ADP employment release which showed a gain of 497,000. There was speculation of a blowout nonfarm payroll reading but in the end, the consensus estimate was close and the US dollar was broadly lower on expectations that the Fed could be close to winding up its rate-tightening cycle. GBP/USD tested support at 1.2782 earlier today. The next support level is 1.2716 There is resistance at 1.2906 and 1.2972
by OANDA
Time To Drop After Tuesday's Nice Pop?Assuming we are early into the long trip downward would put us somewhere in the early stages of Cycle wave C down, Primary wave 1 down, Intermediate wave 2 up. This would have made Intermediate wave 1 down 5 trading days long with a 120.39 point drop. Based on waves ending in C12, Intermediate wave 2 will last 1 day. There are zero other possible lengths. The quartile movements (blue levels on left) are 27.99%, 50.12%, and 56.51%. Based on waves ending in 12, strongest model agreement for length remains at 1 trading day and second strongest by a lot is 2 trading days. Quartile retracement levels (yellow lines) are at 27.99%, 42.03%, and 66.20%. Tuesday was the first official trading day of Intermediate wave 2. This is quite possibly the only trading day of wave 2. IF wave 2 achieves a new high tomorrow, Thursday would likely not see a new high for a very long time until we drop well below 4328 again. IF a new high is achieved tomorrow it may remain at or under 4400. IF we break above 4400 tomorrow, we may still be BACK in Cycle wave B as was identified in my most recent Devil’s Advocate Analysis. IF back in, well still in B, the market is either in the final Intermediate wave 4 Minor wave B up or the early stages of Intermediate wave 5 which would likely lead to a final market top within 2 weeks. If no new high is achieved and the market falls (likely based on all the Bank of England/Central Bank/Federal Reserve panels in Portugal) the market is in the early stages of Intermediate wave 3 down. This scenario would have seen Intermediate wave 2 last a single day and retrace 46.8% of Intermediate wave 1’s movement. Based on waves ending in C13, the quartile movement extensions of wave 1’s movement (blue levels farther on right) are 135.64%, 140.60%, and 165.83%. Most model agree on a length of 4-6 days, with secondary agreement at 7, 8, or 10 trading days long. Based on waves ending in 13, the quartile movement extensions (yellow) are 137.30%, 162.265%, and 198.02%. Models have strongest agreement on length at 5 days long, second is 1 or 4 days, third most agreement is 3 days, fourth is 7 days, fifth is 6 days, sixth is 2 or 10 days. Based on these models, the initial forecast is a possible market low late next week after the American holiday possibly below 4279 and probably not below 4240. This would equate to a drop of around 120 points in about 6 trading days. This is pretty much the same thing accomplished by Intermediate wave 1. Let us see how this plays out beginning with movement tomorrow.
SP:SPXShort
by StockSignaler
short term buy on crude oilU.S. Oil still stuck in consolidation, making big ranging moves. Monday was a federal holiday, Juneteenth. New York -Traded Texas intermediate, or WTI did not make much movement upon opening. Sunday or Monday, closing with a bearish candle at $90.87. Tuesday dropped 1% or 100 pips to 69.82 area, then regaining by the end of the day closing at 71.63 Wednesday Fed Chair J. Powell had a testimonial that continued into Thursday. This testimony comes a week after a hawkish interest rate “skip” Last week the federal Reserve was careful to word skip, and not a pause so the markets would not react in a negative way. The dollar soared, along with U.S. stock, with oil tumbling. Top investors and analysts stated the Fed wanted to appear to be hawkish in the next FED meeting so the market would not lose everything it has gained; stating they see it very unlikely the FED will continue to raise rates and believe the fed is done raising rates. The two-day testimony Powell was sure to emphasize raising of rates is not over, and he is standing strong on bringing inflation down to 2%. A hawkish Powell has pushed oil down nearly 4% Wednesday and Thursday. Alongside a hawkish Powell the BOE raised interest rates by half a percentage point. The U.K.’s interest rate is now at 5%; the highest it has been since 2008. The BOE decided to raise rates drastically this time due to U.K. inflation will take longer than anticipated to bring down. The U.K. is right behind the Federal with interest rate at 5% and the U.S. at 5.25% pausing for the first time for 10 straight FED meetings. The U.S. Crude inventory was released Thursday. The forecast for the week ending on June 16 was 1.873M actual came in as -3.831M. Crude oil inventories is reported on a weekly basis for the pervious week. This report measures the number of barrels of commercial oil held by U.S. firms, reported by the EIA (Energy Information Administration. Last week inventories fell greater than expected implying Oil demand is greater which is bullish for oil. It is typical for oil demand to be greater this time of year with summer travel. Wednesday marked the first day of the summer. The report caused oil to spike just a little, as other economical news overweighed the bullish report. Crude oil moves against the dollar, with hawkish news for the dollar it is bearish for oil. Powell being adamant about continuing to raise rates and the BOE raising rates could slow economic growth and reduce oil demand. Crude oil has been ranging (consolidating) in the same zone on the 4hr and daily timeframe since May 03. 2023. Oil has rejected off the demand zone two time and rejected the supply zone twice as well. Only the daily a Double top can be seen forming. Oil would need to break and close below the neckline for the double top to confirm a continued sell down. If neckline is broken and closes below oil can go to pervious rejected low of $65.50 and 63.96. The Fib retracement was used to confirm retracement levels of potential TP areas. If oil rejects at the neckline, it is possible the range will continue you. If it rejects the neckline a potential buy with retracement/reversal key areas being $72.71 and $74.20. Crude oil would need to break and close above $74.95 for a confirmation for a long term buy.
TVC:USOILLong
by UnknownUnicorn36761102
GB10Y - UK pensions at risk? update. #BOE #recession"The Bank of England has hiked interest rates to 5 per cent in a further blow to homeowners struggling with spiralling mortgage costs. The rise, up from 4.5 per cent, is the sharpest increase since February – surprising economists who had been expecting a smaller increase of 0.25 percentage points – and sends interest rates to their highest level in 15 years! The move is set to deepen the mortgage crisis as borrowing costs rose for the 13th time in a row in an effort to curb inflation." *Fractal taken from 2007 high for the GB10Y - Gilt/Bond, reaching similar level's before reversing back down. I would expect the same to happen going forward. inflation is way above current interest rates, with the BOE stuck between banking crisis or a recession. I believe we'll see both! - Banking crisis, potential bail out's - expanding the currency supply further which will create more inflation! Pension's will continue too loose value, as bank of England will not be able to raise rates high enough to match inflation. "It comes as the rate of inflation remains unexpectedly stubborn – frozen at 8.7 per cent in May. Analysts had expected the Consumer Prices Index, which peaked at 11.1 per cent in October last year, to fall back to 8.4 per cent." What does this mean for the value of the pound? I'm actually expecting more strength in the GBP - purely from the weakness of the dollar. I would expect the fed to continue to pause now that inflation is finally dropping. FedNow expected to launch on the 1st of July, this will enable faster payment's and a surplus of dollars entering the markets if needed. again weaken's the purchasing power of the DXY - by adding more supply to the currency.
TVC:GB10YShort
by dibz1996
GBPUSD: My 4 scenarios for this weekThese are just my ideas, what I’m expecting, and why, with this week’s the big fundamentals. Overview Big market-moving news this week with Wednesday’s UK CPI, Thursday’s BoE Interest Rate Decision and Forecast, there is also FED Powell’s testimony in between the UK events on Wednesday. Several things could play out with the UK news, which is what my scenarios are based on. I’m expecting Powell to be hawkish because even though it’s clear that the US is on top of inflation, they are still double their target and thanks to their economic performance they have room to keep tightening and can still avoid recession, imho. The BoE on the other hand have a massive predicament. Inflation is out of control, far worse than the other G7 economies. Interest rate rises are squeezing the economy, UK mortgage rates are now hitting 6%. In my opinion another 1.25% interest rates will cause recession. The BoE moved too slow and are behind inflation, they have to keep hiking to do anything about it, but there will be a tipping point where the market sees this as a negative for the GBP. UK Inflation / Interest Rates BoE have consistently under-estimated inflation through this period. This time their forecast is higher than the previous month forecast (8.5% compared to 8.3% previous, inflation fell to 8.7% last time so I think they’ve been more realistic with their prediction this time). If inflation is coming down (I think it is), then we could see a better than forecast reduction (red), which could be bad for GBPUSD. If it comes in lower (red) then it’s ‘more’ likely there’ll be a 0.25% rate hike, this is priced in, and I think this will cause GU to fall. If BoE are brave enough to go with the 0.5% outside prediction, then this could cause GU to rise. If Wednesday’s CPI number shows inflation is above predication (green) (and likely to be rising as it was 8,.7% last time and the predication this time is 8.5%), then this further demonstrates that the BoE have been way off the mark in controlling it compared to the rest of the G7, which is not good. I do think short term this will be positive for GU, but only for banks making money, it’s terrible for the UK economy and the BoE. If it is green and BoE only raise rates by 0.25% then I think this may send GU down as it’s a further demonstration of their ineptitude. If they do go with the 0.5% hike in this scenario, then this could send sterling higher in the short term. Either way and in each scenario, I think GU will struggle to get beyond 1.29 in this visit based on long term dynamic trendline, overall down-trend, a bubble of a credit based economy, better performing US economy and the US being the global currency (and expecting China performance below expectations), etc etc, and breathe…. Also, in technical news, I’m also seeing some divergence on the RSI, and GU is overbought. My Scenarios Here’s my scenarios on the chart, end of today I’m expecting to be around the 1.27 level on the chart based on retracement from Friday’s high and DXY having some room to move up to resistance (around 1.03), but let’s see what happens today and I'll review this again this evening. 1. Red CPI / 0.25% Hike This is an inflation figure that comes in below the 8.5% prediction and the BoE raising rates by 0.25%. This is what I think will happen and it will mean reversal. 2. Red CPI / 0.5% Hike This is an inflation figure that comes in below the 8.5% prediction and the BoE raising rates by 0.5%. This is what should happen if the BoE are brave enough, but I think it will worry markets about recession. 3. Green CPI / 0.25% Hike This is an inflation figure that comes in above the 8.5% prediction and the BoE raising rates by 0.25%. This is a terrible situation, inflation going up and the BoE still not having the balls to make up for lost time and tackle it head on. 4. Green CPI / 0.5% Hike This is an inflation figure that comes in above the 8.5% prediction and the BoE raising rates by 0.5%. In this scenario this is what I believe the BoE should do, it will likely cause GU to go up, but as I’ve said I personally think topside is limited by the prevailing downtrend. In this scenario there will be growing fears of a recession, change of government will be pretty much a given, so overall I still think this will be bad for GU in the medium term. These are just my thoughts as we go into the next few days. Interested to hear your comments so I can keep learning and adjusting my thinking!
by Finchcliffe
29
Resistance at 1.267: Key Level to Watch After BoE Rate Decision The UK continues to struggle with high inflation, as demonstrated once again this morning when headline inflation exceeded expectations at 8.7%, surpassing the projected 8.4%. Core inflation also outperformed, registering a 7.1% figure compared to the expected 6.8%. This divergence emphasizes the contrast between the UK and its counterparts in the US and Europe. Tomorrow, the Bank of England is set to announce its interest rate decision, and there are expectations of further tightening from the central bank. Given the elevated level of inflation, the bank may have little choice but to maintain a hawkish stance. Last week, the GBPUSD initially tested the support level at the previous resistance of 1.250. However, that brief decline was followed by four consecutive days of significant gains, ultimately reaching a new high for the year. There was a temporary resistance encountered at a critical level of 1.267. Following tomorrow's rate decision, this level could potentially act as a support area, particularly considering the slight pullback observed in recent days and the elevated RSI (Relative Strength Index). On the other side of the trade, we have Federal Reserve Chair Jerome Powell's comments on the central bank's ongoing battle against inflation falling short of the market's more hawkish expectations. During his testimony to lawmakers, Powell acknowledged that inflation remains significantly above the Fed's target and indicated that raising rates could still be a sensible course of action, albeit at a more moderate pace. Traders particularly took note of the term "moderate," which Powell used to qualify the potential rate increases. We still have one more day of testimony from Powell.
by BlackBull_Markets
GBP/USD dips after inflation jumps, BoE up nextThe British pound has edged lower on Wednesday. GBP is trading at 1.2724 in Europe, down 0.3%. GBP/USD spiked after today's inflation release but in currently in negative territory. The UK released the May inflation report today, and the results were a major disappointment, to put it mildly. With inflation falling for two straight months, there were hopes that the Bank of England's rate policy was slowly working and the downtrend would continue. The monthly readings showed that headline and core CPI eased, but the annualized readings were worse than expected. Headline CPI remained at 8.7%, above the consensus of 8.4%. Core CPI rose from 6.8% to 7.1%, above the consensus of 6.8%, the highest level since March 1992. The core rate, which excludes food and energy prices, is considered more important, and the 0.3% gain is a huge disappointment for the BoE. The Bank of England won't have much time to mull over the inflation figures, as it announces its rate decision on Thursday. There's little doubt that the BoE will have to raise rates for a 13th consecutive time, and today's inflation numbers mean there is a strong possibility of an oversize 0.50% increase. The BoE finds itself between a rock and a hard place, as it struggles to contain inflation without causing a recession. The resilient labor market has complicated the BoE's attempts to cool the economy, and the markets are projecting that the Bank Rate, currently at 4.5%, won't peak until 6%. High inflation has already caused a cost-of-living crisis, and more rate hikes will only exacerbate the pain. Fed Chair Powell begins two days of testimony before Congress on Wednesday. Lawmakers are expected to grill Powell about the Fed's rate policy. The Fed paused at this month's meeting but is expected to raise rates at the July meeting. Powell has said that he can pull off a soft landing that will avoid a recession and jump in unemployment, but he'll likely have to answer pointed questions from lawmakers who are concerned that higher rates will damage the economy. 1.2719 remains under pressure in support. Next, there is support at 1.2645 There is resistance at 1.2848 and 1.2950
by OANDA
GBP/USD lower ahead of UK inflationThe British pound is lower on Tuesday. In the European session, GBP/USD is trading at 1.2739, down 0.41%. The UK releases the May inflation report on Wednesday and BoE policy makers will be hoping that inflation continues to trend lower. Inflation dropped in April to 8.7%, decelerating for a second straight month. The consensus stands at 8.4%, and the good news is that those awful readings above 10% appear to be over. On a monthly basis, inflation is expected to fall to 0.5% in May, down from 1.2% in April. Inflation appears to have peaked and is heading lower, but nobody at the Bank of England is smiling. The UK is expected to have one of the highest inflation rates in the G-20 this year at 6.9% and the BoE's 2% target is miles away. Finance Minister Sunak has set a goal of lowering inflation to 5% by the end of the year, which seems feasible if inflation continues to downtrend in the coming months. The BoE will be in the spotlight on Thursday when it makes its rate announcement. The markets have priced in a 25-basis point hike at 70%, with a 30% chance of an oversize 50-bp increase. If inflation falls as expected to 8.4% or lower, the MPC should be able to proceed with the 25-bp hike, although central banks have a tendency of surprising the money markets. In the US, it's an unusually light data calendar this week. There are no tier-1 releases on Tuesday, and the markets are looking ahead to Wednesday, with Jerome Powell testifying before the House Financial Services Committee. Powell will have to clarify to lawmakers the Fed's interest rate path, as the Fed paused last week after ten straight hikes but expects to renew hiking in July. 1.2719 is under pressure in support. Next, there is support at 1.2589 There is resistance at 1.2848 and 1.2950
by OANDA
GBP/USD dips after disappointing UK inflationGBP/USD is down for a third straight day, trading at 1.2374, down 0.33%. Earlier, GBP/USD touched a low of 1.2369, its lowest level since April 18th. The FOMC releases the minutes of the May meeting later today. The closely-watched UK inflation report for April was a disappointment. There was some good news as headline inflation fell to 8.7%, down sharply from 10.1%. Hopefully, this is the end, finally, of inflation in double-digit territory. Still, the reading was above the estimate of 8.2%. There was nothing positive about core CPI, which is the more important gauge of inflation. The core rate jumped from 6.2% to 6.8%. Forecasters had expected core CPI to remain at 6.2% and the unexpected rise is clearly a big step backward for the Bank of England in its tenacious battle with inflation. Governor Bailey is speaking at two public engagements today, and we can expect him to make mention of the inflation report. The BoE has raised rates by 1% this year, bringing the cash rate to 5.25%, but inflation has proven to be persistent. The IMF has projected that UK inflation would fall to around 5% by the end of the year and drop to the 2% target by the middle of 2025. It will be a bumpy road to restore low inflation, and the BoE will probably have to raise rates again in June, unless core inflation surprises dramatically on the downside. US lawmakers continue to fight over the debt ceiling, as US Treasury Secretary Yellen has warned that the ceiling could be reached on June 1st, which doesn't leave a lot of time for an agreement. Republicans have said Yellen's date isn't accurate, but even if the deadline is a week or two later, Congress seems to be playing with fire to score political points. Investors are worried, and stock markets are down while safe-havens such as gold and the US dollar are higher. We've seen this movie before, and Congress has always reached a deal before the deadline. Still, we can expect risk sentiment to slide and the US dollar to gain ground the longer we go without a deal. GBP/USD tested support at 1.2375 in the European session. Below, there is support at 1.2307 1.2461 and 1.2529 are the next resistance levels
by OANDA
GBP/USD drifting lower ahead of UK inflationGBP/USD is trading quietly at 1.2423, down 0.11% on the day. UK inflation has been a thorn in the side of the Bank of England for months and is still above 10%. The UK releases the April inflation report on Wednesday and relief may finally have arrived. Headline CPI is expected to fall from 10.1% all the way to 8.3% y/y. That would be welcome news, but core CPI, which is a better gauge of inflation trends, is projected to remain unchanged at 6.2% y/y. Bank of England Governor Bailey reiterated today in testimony before the Treasury Select Committee that inflation has turned the corner, and we'll know if he's correct on Wednesday. Even if inflation surprises to the downside, it will be miles higher than the 2% target which Bailey has pledged to reach. That means that more rate hikes are likely until both headline and core inflation show rapid declines. Bailey received some good news from the International Monetary Fund, which revised upwards its growth forecast for 2023 from -0.3% to +0.4%. This means that the UK economy, while still struggling, will avoid a recession. The IMF projected that UK inflation would fall to around 5% by the end of the year and drop to the 2% target by the middle of 2025. The US dollar is higher against most of the majors today, as investors remain concerned about the US debt ceiling standoff. The Democrats and Republicans continue to negotiate, with a June 1st deadline just a week away. The yield on the US 10-year Treasury notes has risen to 3.75%, its highest level since March. This has given a boost to the US dollar and yields could continue to push higher the closer we get to the deadline without a deal. The United States government has never defaulted on its debt, and a deal is likely to be hammered out before the deadline. There is support at 1.2307 and 1.2221 1.2375 and 1.2461 are the next resistance levels
by OANDA
GBP/USD flat as UK GDP a mixed bagGBP/USD is trading at 1.2517 in Europe, almost unchanged. In the UK, GDP declined by 0.3% in March m/m, below the 0.1% estimate and the February reading of 0.0%. Still, the economy managed to gain 0.1% in the first quarter, unchanged from Q4 2022 and matching the estimate. There was no surprise as the Bank of England raised rates by 25 basis points, bringing the cash rate to 4.50%, its highest since 2008. This marked the twelfth consecutive hike in the current rate-tightening cycle, underscoring the BoE's pledge to curb hot inflation. Governor Bailey said after the rate announcement that Bank would "stay the course to make sure that inflation falls all the way back to the 2% target". Nobody is expecting that the road to 2% will be easy, with inflation currently in double digits. The BoE remains optimistic that inflation will fall rapidly during the year and will fall to 5% by the end of the year. In February, the BOE predicted 4% inflation by the end of the year. This seems like a tall order but is certainly possible if the rate hikes make themselves felt and cool the economy. There have been constant concerns that the BoE's aggressive rate policy would lead to a recession, and six months ago, the BoE had projected a recession. Bailey reversed course yesterday, saying that the drop in energy prices and stronger economic growth meant that GDP would expand by a weak 0.25% in 2023, versus the 0.5% contraction in the previous forecast. In the US, the economy is showing signs of cooling and high interest rates are expected to dampen the robust labour market. Unemployment claims surprised on the upside on Thursday, rising from 245,000 to 264,000, well above the estimate of 242,000. This is just one weekly report, but it's sure to raise speculation that the labour market is showing cracks. The US wraps up the week with UoM Consumer Confidence, which is pointing to a rather sour US consumer. The indicator fell to 63.5 in April and is expected to ease to 63.0 in May. Weak consumer confidence can translate into a decrease in consumer spending, a key driver of economic growth. GBP/USD is putting pressure on support at 1.2495. The next support level is 1.2366 1.2573 and 1.2676 are the next resistance lines
by OANDA
GBP/USD -11/5/2023-• Despite hawkish message delivered by the BOE today, recent USD strength is putting pressure on the pound and all the majors • We have a couple of Dojis in the recent past sessions which showed a slowing bullish momentum followed by a big bearish candlestick today • Bears are testing the 20 SMA which has been supporting the prices for a while • While there is a weakness prevailing, longer term trend is still bullish as long as the Pound is trading above the ascending trend line • One critical support level is very important for the bulls to defend which is in the mid 1.24s (1.2450-1.2460) which is the previous December 2022 - January 2023 resistance and the trend line support • Bears will do their best to secure several daily closes below the 20 SMA and the supporting trend line • From a risk reward perspective, bulls might wait for a re-test of the trend line before getting in the market again Traders, if you like this idea please comment and like ✅ Here to answer all your questions, Good luck
by RamziAbouAbdallah-CMT
The wedge pattern on cable! Bears waking up? So far this year, Cable has made significant progress. However, the fifth wave’s potential for further growth appears limited due to its final leg within a higher degree impulse, as evident on the daily chart. Interestingly, there have been instances of sluggish price movement and overlaps around the 1.23 area. This prompts us to question whether this could be the fifth wave nearing resistance at 1.26/1.27, potentially forming an ending diagonal (wedge) pattern. These patterns often result in sharp reversals, so caution is advised for bullish traders, particularly considering the absence of buyers even on a “hawkish BoE” day. It is possible that speculators are losing hope for the Bank of England’s ability to curb inflation.
by ew-forecast
1
GBPUSD Trading Near 12 Month HighHi Traders! We are trading near May 23rd 2022's high of around 1.26632, hence why we have been struggling to get any momentum. The market is currently undecided as to where to go from here. Due to the market being at the highest point for almost 12 months, there is bound to be some resistance at this level. We also had an inverse head & shoulders pattern forming over this time, so this could also be a sign of a reversal to the very long term bearish trend. Fundamental news will also have a key part to play as to where we go from here with the BoE Interest Rate Decision and BoE MPC Meeting Minutes coming out later today. Please do not forget to like, comment and follow. We appreciate your support. BluetonaFX
by BluetonaFX
2
GBP/USD - Pound rebounds as wage growth remains high, CPI expectThe UK employment report for March was a mixed bag. The number of unemployed persons jumped by 28,200, after a decline of 18,000 in February and higher than the estimate of -11,800. The unemployment rate nudged higher from 3.7% to 3.8%. These numbers, which point to a slight weakening in the labour market, were overshadowed by a jump in wage growth. Average earnings excluding bonuses hit 6.6% y/y in the three months through February, versus the revised upwards January read of 6.6% and the estimate of 6.2%. Wage growth remains stubbornly high, despite the Bank of England's steep tightening and that has to be a key concern for Bailey & Company. As wages continue to accelerate, the concern of a wages/price spiral remains very real and supports another rate hike at the May meeting. Inflation rose in February to 10.4%, up from 10.1%, and Wednesday's inflation report will be a crucial report card for the BoE. If inflation doesn't fall below 10% (the forecast stands at 9.8%), it's hard to see how the BoE can ease up on its relentless rate hikes. The wage growth numbers were enough for Goldman Sachs to upwardly revise its rate expectations for May from a hold to a 25 basis-point hike. The UK's uncertain economic landscape has become cloudier as hundreds of thousands of public sector workers are striking or planning to strike due to wage concerns. Workers have seen their real income fall as inflation has been at double-digit levels. The government has called for wage restraint in its battle to curb inflation, but strikers won't be in the mood to compromise as long as wages fail to keep pace with inflation. GBP/USD tested resistance at 1.2436 earlier in the day. The next resistance line is 1.2526 There is support at 1.2325 and 1.2235
by OANDA
GBP/USD - Will BoE's Bailey shake up the British pound?The British pound is trading quietly on Monday. In the European session, GBP/USD is trading at 122.49, up 0.15%. The pound has looked sharp of late, and last it touched a high of 1.2343, its highest level since late January. In the UK, there are no tier-1 releases this week, but that doesn't mean it will be a quiet week for the pound. Investors will be listening closely as BoE Governor Bailey speaks at public engagements today and on Tuesday. The latter should be especially interesting, as Bailey will testify before the Treasury Select Committee about the Silicon Valley collapse. Bailey to testify on SVB collapse Bailey has sounded surprisingly optimistic, given that inflation remains in double digits despite the BoE raising rates 11 consecutive times. After the 25-bp rate hike earlier this month, Bailey said that he expected inflation to fall "quite rapidly" in the next few months. On Friday, Bailey said that the prospects for growth were better and there was a "pretty strong likelihood" that the country would avoid a recession this year. I'm not at all sure that lawmakers share the Governor's optimism, and they will likely grill Bailey on the Bank's rate policy, which has failed to reign in high inflation. Sticky inflation is not the only headache that Bailey needs to deal with. The banking crisis has caused stress in the financial markets, and investors remain concerned about the stability of the banking sector. Authorities in Switzerland and the US have acted quickly and decisively, which has helped calm down the markets. President Biden and Treasury Secretary Yellen have said that the banking system is safe, and on Friday, the Financial Stability Oversight Council, a group of financial regulators, said that the US banking system remains "sound and resilient". The stresses on the banking system are being closely watched by central banks, which are fearful of the contagion spreading as well as a credit crunch, which could slow economic growth. ECB President Lagarde said last week that the bank crisis could help lower inflation, and UK lawmakers might ask Bailey if the crisis could dampen inflation in the UK. GBP/USD is testing resistance at 1.2248. The next resistance line is 1.2341 There is support at 1.2152 and 1.2071
by OANDA
GBP/USD - Pound slips as PMIs dip, BoE hikes againThe British pound is down considerably on Friday and the US dollar has posted gains against the major currencies. In the European session, GBP/USD is trading at 122.13, down 0.60%. UK releases are a mixed bag on Friday. Business activity and manufacturing weakened in March. The Services PMI eased to 52.8, down from 53.5 in February and shy of the estimate of 53.0 points. Manufacturing fell to 48.0, versus 49.3 in February and an estimate of 52.8 points. Manufacturing has declined for eight straight months, with readings below the 50.0 level which separates contraction from expansion. Business activity continues to show modest expansion and is the driver behind economic growth in the UK. Given the weak economic landscape, it's no surprise that consumer confidence remains mired in negative territory. Double-digit inflation and high interest rates have sapped consumer optimism. In March, GfK Consumer Confidence came in at -36, as expected and a bit higher than the previous reading of -38 points. With consumers may in a sour mood, a strong retail sales report for February was that much more surprising, with a gain of 1.2%. This beat the upwardly revised January gain of 0.9% and crushed the estimate of 0.2%. Core retail sales jumped 1.5%, versus 0.9% in January, which was upwardly revised, and beat the estimate of 0.1%. As expected the Bank of England raised rates by 25 basis points on Thursday. This marked an 11th straight hike, although the 25-bp move was the smallest increase since June. Is the BoE done with tightening? This week's disappointing acceleration in inflation has increased the odds of at least one more hike, although BoE Governor Bailey was non-committal when asked about future hikes. Like the ECB, the BoE didn't flinch from delivering an expected rate hike despite the banking crisis and I wouldn't be surprised if more hikes are in store unless inflation shows clear signs of easing. There is resistance at 1.2324, followed by 1.2445 GBP/USD has support at 1.2253 and 1.2132
by OANDA