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GBPUSD Turns Range bound Ahead of Inflation Report

By:
Colin First
Published: May 22, 2018, 07:00 UTC

The pair awaits further data scheduled to be released today and later in the week

GBPUSD Tuesday

The GBPUSD pair has been moving range bound since trading session opened for the week, moving well inside 1.34 handle. A fresh round of Brexit talks begins today, and positive headlines from the negotiations could send the GBP higher, while continued loggerheads over Northern Ireland borders, UK sovereignty, or the EU customs union could open up further downside weakness for the Pound. While the pair was moving range bound around 1.35 price handle the last few weeks, the pair saw steep bearish decline as trading session began for the week influenced by news that Scottish Prime Minister, Nicola Sturgeon, pledged to restart a drive for Scottish independence, adding yet another twist to the Brexit-saga. This week is set to bring a huge amount of Sterling triggers from BOE member’s speeches to key data points such as GDP, Home sales, CPI and Inflation report hearings.

GBPUSD Range Bound

British Pound has in recent times taken to severe price swings based on inflation data outcome with Sterling hitting new highs and new lows based on how inflation report turned out. Macro Calendar looks light for US markets today while British calendar looks active across UK’s market hours with release of CBI industrial trends orders and Inflation report hearings. Also members from monetary policy Committee Vlieghe, Ramsden, Saunders and BOE Governor Carney are expected to speak today which is expected to cause quite a stir for the pair. A positive remark from MPC member or hawkish data from inflation report could help GBPUSD move back into 1.35 handle during today’s trading session.

GBPUSD Hourly
GBPUSD Hourly

Previously a dovish result in March inflation numbers resulted in pair seeing a steep decline and technical indicators also point to possibility of another bearish bout with momentum indicator hovering in negative levels and candle movement gaining downward traction in short-term the 4 hours chart, a dovish stance from MPC members ahead of inflation data scheduled to release later this week could result in Pound bulls continuing to drag Sterling to new lows. Expected support and resistance for the pair are at 1.3390 / 1.3355 / 1.3320 and 1.3445 / 1.3490 /1.3520 respectively.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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