A pound does not need a whip, but a carrot
March 12, 2018 1:21 pmVideo
Latest News
- The Fed and global instability: a double blow to American markets April 18, 2024
- Forecast for EUR/USD on April 18, 2024 April 18, 2024
- Forecast for GBP/USD on April 18, 2024 April 18, 2024
- Forecast for AUD/USD on April 18, 2024 April 18, 2024
- Outlook for GBP/USD on April 18. Pound was not impressed by the inflation data April 18, 2024
- Outlook for EUR/USD on April 18. Euro has fallen into a new flat April 18, 2024
- GBP/USD. Correction or trend reversal? April 18, 2024
- The FOMC will not lower rates in 2024 April 18, 2024
- Powell made a bold point, and Bailey did not report anything important April 18, 2024
- Will the euro take a risk? April 18, 2024
- Trading Signals for GOLD (XAU/USD) for April 17-19, 2024: sell below $2,400 (21 SMA – double top) April 17, 2024
- Technical Analysis – GBPCAD hits a wall but bulls not ready to give up April 17, 2024
- Trading Signals for Ethereum (ETH/USD) for April 17-19, 2024: sell below $3,125 (21 SMA – 2/8 Murray) April 17, 2024
- Analysis for the EUR/USD pair on April 17th. Jerome Powell didn’t help the dollar much April 17, 2024
- Analysis for GBP/USD pair on April 17th. British inflation overtakes American inflation April 17, 2024
- USD/JPY: Simple Trading tips for novice traders on April 17th (US session) April 17, 2024
- GBP/USD: Simple trading tips for novice traders on April 17th (US session) April 17, 2024
- EUR/USD: Simple trading tips for novice traders on April 17th (US session) April 17, 2024
- GBP/USD: trading plan for the US session on April 17th (analysis of morning deals) April 17, 2024
- Technical Analysis – EURUSD takes a breather after sharp tumble April 17, 2024
The British pound is losing sensitivity to the news with a political tinge, as evidenced by its striking resistance to the negative. The GBP / USD pair has managed to register the narrowest trading range since February 2016, despite the statement of the chairman of the European Council Donald Trump. The negotiations will lead to a deadlock if Britain does not present the E.U. with a realistic solution of the issue on the Irish border. On Bloomberg, referring to competent sources who wished to remain anonymous, said that some government members believe that a trade deal could not be achieved until January 2019.
Weekly dynamics of GBP / USD pair
Source: Bloomberg.
At present, investors have lost the hope of getting at least some certainty to the outcome of the Brexit talks before the EU summit for the third decade in March. In such conditions, their attention may shift to short-term drivers of GBP / USD pair quotations. Against the backdrop of the almost naked economic calendar for Britain, these events/data should be noted: the importance of data releases on US inflation and retail sales, the development of the situation around the currency wars and the speech of Chancellor of the Treasury, Philip Anthony Hammond. The latter plans to present a plan for the borrowing of the country, which will be characterized by the lowest emissions for the last at least 10 years, according to Bloomberg experts. Theoretically, this should lead to an increase in demand for British bonds in the secondary market, lower yields and short-term weaken the pound. In the medium- and long-term period, the high demand of non-residents for British securities in the face of declining supply is a bullish factor for the GBP / USD pair. However, the interest of foreign investors should be returned.
The uncertainty surrounding the Brexit negotiations should be added to the growing tension within the United Kingdom, wherein Scotland and Wales are willing to live up to the old rules of EU laws, and London has to look for leverage to prevent a repeat of the referendum history of Scottish independence. The outcome may be quite different.
Despite all the troubles of the pound, the consensus forecast of experts in Reuters suggests that after 12 months, it will trade at $ 1.41 due to the weakness of the US dollar and the continuation of the cycle of normalization of the monetary policy BoE. Currently, the futures market feels comfortable with its forecast that the REPO rate will be raised in May, but the decisions of the Bank of England will depend primarily on macroeconomic statistics.
Thus, when Hammond comes out and the release of data on US inflation will be released on Tuesday, it is likely to be an important day to determine the fate of GBP / USD pair. Acceleration of the CPI allows to return the investors’ interest on the monetary restriction of the Fed and provide support to the US dollar.
Technically, the activation of the inverted “Bat” pattern and the exit of quotes outside the downward trading channel will increase the risk of GBP / USD pair quotations rising towards the level of 1.41. On the contrary, the decline of the sterling below $ 1.38 will create the prerequisites for the realization of the Gartley pattern.
GBP / USD pair, daily chart
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: