GBPUSD to Decline Further as Disappointing Macro Data Continues Weigh down Sterling

GBPUSD is on a bearish range bound momentum since trading session began for the week and has breached psychological support at 1.35 twice in last two trading sessions. Sterling took a bearish hit mid-April and has been on a steep decline since then. Despite a few positive triggers British Pound continues to decline against US dollar over dovish macro economic data and growing strength of USD. The pair is currently trading at 1.35260 and hit as low as 1.34811 earlier today.

GBPUSD Under Pressure

Greenback was boosted by hawkish comments from Jerome Powell, the Federal Reserve’s chairman, who said that “some investors and institutions may not be well positioned for anticipated US interest rate hikes” when he spoke at an event organized by the Swiss National Bank and the International Monetary Fund in Zurich yesterday. On the other hand, the British pound is very weak as investors are expecting the Bank of England to leave rates on hold at the next Bank of England meeting this Thursday. The recent macroeconomic data in the UK has disappointed the market’s expectations and analysts are now forecasting that the rate hike, which was initially expected in April, will be pushed back in November.

The British Pound declined nearly 0.55% in last two trading session post disappointing macro economic data released in last two days.  In the UK, Halifax HPI plunged 3.1%, its sharpest decline since 2010. Similarly In the UK, Halifax HPI plunged 3.1%, its sharpest decline since 2010. Similarly BRC Retail Sales Monitor which was released later in day also had a dovish outcome at -4.2% far lower than forecast of -0.8% the lowest reading in a decade. This combined with better than expected US JOLTs Job Opening data and positive momentum post Fed chain Jerome Powell’s Speech pushed the pair to four month low. Expected support and resistance for the pair are at 1.3445 / 1.3410 and 1.3590 / 1.3625 respectively.