GBP/USD Forecast: Pound Sterling could remain directionless ahead of US and UK inflation data
Despite the sharp decline see on Monday, GBP/USD closed the previous week virtually unchanged above 1.2600. The pair struggles to find direction at the beginning of the new week as investors gear up for key inflation reading from the US and the UK.
The risk-positive market environment made it difficult for the US Dollar (USD) gather strength on Friday and allowed GBP/USD to end the day marginally higher. The S&P 500 hit a new record high after the US Bureau of Labor Statistics (BLS) reported that it revised the monthly Consumer Price Index (CPI) increase for December lower to 0.2% from 0.3%. Read more…
GBP/USD outlook: Limited recovery warns of prolonged sideways mode
Cable ticked higher and hit new highest since Feb 2 in early Monday but was so far unable to sustain gains, keeping the price within congestion which extends into fourth straight day. A double Doji (Fri/Thu) signal indecision as daily studies are mixed and keep near-term price action between 200DMA (1.2564) and falling 10DMA (1.2638).
Break of either side to generate initial direction signal, although more work at the upside will be required. Breach of sideways-moving and converged daily Tenkan-Kijun-sen (1.2645/51 respectively) to revive bulls, with lift and close above daily cloud top (1.2691) to confirm continuation of recovery leg from 1.2518 (Feb 5 low). Read more…
GBP/USD Price Analysis: The key contention level is seen at 1.2600–1.2610 zone
The GBP/USD pair consolidates within a narrow trading range of 1.2600–1.2645 during the early European trading hours on Monday. The Bank of England (BoE) governor, Sarah Breeden said last week that the central bank has shifted from tightening rates to thinking about when they might come down as the recent falls in UK inflation have changed the BoE’s outlook. Traders prefer to wait on the sidelines ahead of the UK labor market data on Tuesday. At press time, GBP/USD is trading at 1.2630, gaining 0.01% on the day.
Technically, GBP/USD maintains the bearish outlook unchanged as the pair is below the 100-period Exponential Moving Average (EMA) on the four-hour chart. It’s worth noting that the Relative Strength Index (RSI) hovers around the 50 midlines, indicating the non-directional action of the pair. Read more…