You are here: Home > articles > Forex > GBP/USD: Pound did not gain support from fundamental factors
GBP/USD: Pound did not gain support from fundamental factors
April 24, 2023 10:23 amVideo
Latest News
- Trading Signals for EUR/USD for April 24-26, 2024: buy above 1.0670 (21 SMA – 3/8 Murray) April 24, 2024
- Technical Analysis – Alphabet stock is buoyant ahead of earnings April 24, 2024
- Analysis of the EUR/USD pair on April 24th. Waiting for US GDP for the first quarter April 24, 2024
- Analysis of the GBP/USD pair on April 24, 2024 April 24, 2024
- USD/JPY: Simple trading tips for novice traders on April 24th (US session) April 24, 2024
- GBP/USD: Simple trading tips for novice traders on April 24th (US session) April 24, 2024
- Technical Analysis – EURUSD stays beneath 1.0700 April 24, 2024
- EUR/USD: Simple trading tips for novice traders on April 24th (US session) April 24, 2024
- GBP/USD: trading plan for the US session on April 24th (analysis of morning deals). The pound retains hope April 24, 2024
- EUR/USD: trading plan for the US session on April 24th (analysis of morning deals). The euro continues to buy around 1.0688 April 24, 2024
- Forecast for the EUR/USD pair on April 24, 2024 April 24, 2024
- GBP/USD. April 24th. The pound felt strong on Tuesday April 24, 2024
- Overview for the GBP/USD pair on April 24th. Dave Ramsden expects inflation to slow down April 24, 2024
- Technical Analysis – EURCHF heads up after bearish spike April 24, 2024
- Overview for the EUR/USD pair on April 24th. The EU services sector has pushed the euro upwards April 24, 2024
- Video market update for April 24, 2024 April 24, 2024
- Will the BoJ disappoint once again? – Preview April 24, 2024
- Forex forecast 04/24/2024: EUR/USD, USD/CAD, Oil and Bitcoin from Sebastian Seliga April 24, 2024
- USD/JPY: trading tips for beginners for European session on April 24 April 24, 2024
- GBP/USD: trading tips for beginners for European session on April 24 April 24, 2024
If the market doesn’t go where it is expected to be seen, the chances of it moving in the opposite direction increase sharply. The pound had enough data to restore the upward trend against the U.S. dollar, yet it did not took advantage of it. As a result, the GBPUSD pair continues to be stuck in consolidation, fearing that the strength of the American economy will revive its currency from the ashes.
It would seem that at the end of the second ten-day period of April the positivity on Britain was over the top. First, the labor market was pleasingly positive, with low unemployment and average wages rising 6.6%, beating Bloomberg experts’ forecasts of 6.2%. Then inflation did not want to fall below the critical 10% mark, which raised the implied repo rate ceiling from 4.75% to 5%. The futures market is counting on three more acts of monetary tightening by the Bank of England at 25 bps each, the first of which will occur in May. Against the background of the imminent end of the Fed’s monetary restriction cycle, this should have led to a rise in GBPUSD quotes. But in fact it turned out to be more than modest.
One could blame Silvana Tenreyro’s speech, which compared the British economy to a fool in the shower. It scalds itself with boiling water instead of waiting for the water to cool down to a comfortable temperature. Allegedly, the tightening of monetary policy is not yet fully felt, but it will manifest itself, so it’s time to stop raising the cost of borrowing. In fact, Tenreyro has long been considered the Bank of England’s chief “dove.” The markets are used to this.
Meanwhile, statistics on the UK continued to delight the eye. Following the increase in GfK’s consumer confidence to its highest level since the beginning of the armed conflict in Ukraine, business activity reached its annual peak. In this regard, the UK is not inferior to either the eurozone or the U.S., so the IMF’s forecasts of a reduction in its GDP in 2023 look overly gloomy.
Purchasing Managers’ Index Dynamics
Finally, another good news for GBPUSD was the upgrade of the UK’s credit rating outlook from “negative” to “stable” by Standard & Poor’s. According to the agency, the government’s decision to abandon most of the non-financial measures proposed in September 2022 improved budgetary prospects. Coupled with falling energy prices, this reduced short-term recession risks.
Thus, the abundance of positive news could not push GBPUSD quotes upwards. The reason is investors’ doubts about the end of the monetary tightening cycle and the Fed’s “dovish” reversal in 2023. If U.S. GDP and inflation data turn out to be better than forecasts, the U.S. dollar may rise from the ashes, making sterling fans think twice before entering the fray.
Technically, a Splash and Shelf pattern is forming on the GBPUSD daily chart. It makes sense to buy the pair on the breakout of the upper limit of the consolidation range or shelf 1.237–1.247. Sell—in case of a successful assault on support at 1.237.
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: