GBP/USD Falls toward nine-day EMA support near 1.3650

GBP/USD Price Forecast: Falls toward nine-day EMA support near 1.3650

GBP/USD remains subdued after two days of losses, trading around 1.3680 during the European hours on Tuesday. The technical analysis of the daily chart points to a persistent bullish bias, as the pair trades within an ascending channel.

The 14-day Relative Strength Index (RSI), a momentum indicator, is at 56 (neutral) after easing from overbought, keeping momentum above the midline. RSI flattening near 56 signals consolidation risk before trend extension. Read more…

GBP/USD Price Forecast: Bulls turn cautious as UK political chaos counter USD weakness

The GBP/USD pair meets with some supply on Tuesday and erodes a part of the previous day’s strong gains to the 1.3700 mark due to UK-specific concerns. Against the backdrop of the Bank of England’s (BoE) dovish tilt, UK political turmoil turns out to be a key factor behind the British Pound’s (GBP) relative underperformance. This keeps a lid on the currency pair’s sharp recovery from the 1.3500 psychological mark, or a two-week low, touched last Friday.

As was widely expected, the BoE decided to leave interest rates unchanged at the end of the February meeting last Thursday, though the 5-4 MPC vote split was a lot more dovish than expected. Adding to this, the central bank signaled a future rate cut if inflation continued to slow. Moreover, BoE Governor Andrew Bailey told reporters during the press conference that inflation is set to reach the target level sooner than expected. Investors were quick to react and are now pricing in a 50 basis points (bps) BoE rate cut this year, which acts as a headwind for the GBP. Read more…

GBP/USD slows near 1.3700 as politics muddy the outlook

GBP/USD put together a solid two-day rally, gaining over 1.0% and pushing close to the 1.3700 level. The move helped the pair to recover about half of the drop from the 4½-year peak at 1.3868 reached at the end of January, thanks largely to renewed dollar weakness. That said, with the U.K. Prime Minister facing another leadership challenge, the pair couldn’t match the strength seen in other FX majors like EUR/USD.

For now, the pair is hovering just below 1.3700 and well short of the 1.3730–1.3760 resistance zone. The bulls will need to pass through this area to gain access to the 1.3815–1.3840 region. If momentum really picks up, the 1.3950 zone could come into play next. Read more…