GBP/USD upside could be limited as UK political risks rise

Pound Sterling recovers losses despite rising UK political risks, BoE rate cut bets

Pound Sterling (GBP) advances against the US Dollar (USD) after registering modest losses in the previous session, trading around 1.3650 during the Asian hours on Wednesday. The pair could extend losses as the Pound Sterling (GBP) faces pressure from rising political risks in the UK and growing expectations of near-term Bank of England (BoE) rate cuts.

UK Prime Minister Keir Starmer is under mounting pressure after Scottish Labour leader Anas Sarwar called for his resignation over the fallout from the Jeffrey Epstein scandal. Starmer has pushed back against the calls, stating that he is not prepared to abandon his mandate or plunge the country into further instability. Read more…

GBP/USD pulls back from the brink of a fresh bull run

GBP/USD pulled back on Tuesday after Monday’s strong bounce from the 1.3510 low, closing at 1.3641, down 0.39% on the session. The daily chart shows the pair gave back gains from a high of 1.3700, printing a bearish candle that suggests the recovery from Friday’s two-week low is losing steam near the 50% Fibonacci retracement of the 1.3869 to 1.3510 decline (around 1.3690). The broader structure is still bullish, with price holding well above the 50 Exponential Moving Average (EMA) at 1.3512 and the 200 EMA at 1.3352, but the sharp selloff from the late-January high of 1.3869 has carved out a lower high pattern that threatens the uptrend.

Bank of England (BoE) dovishness following last week’s 5-4 split hold at 3.75%, combined with growing UK political uncertainty around Prime Minister Starmer’s leadership, continue to weigh on Pound Sterling. The Stochastic Oscillator (14, 5, 5) reads 51.21/57.04, with %K crossing below %D in neutral territory, pointing to weakening momentum heading into Wednesday’s session. Read more…

GBP/USD slips below 1.3700 as weak US data meets UK political jitters

The Pound Sterling (GBP) consolidates below 1.3700, edges down 0.2% during the North American session on Tuesday as the Greenback pares some of its earlier losses after the release of worse-than-expected US data. GBP/USD trades at 1.3660 after hitting a daily high of 1.3700.

Economic data in the US is not encouraging as consumer spending seems to be taking a toll, following December’s Retail Sales print. On a monthly basis, sales were unchanged from November at 0%, missing forecasts of a 0.4% increase. The so-called Control Group retail sales, used to compute Gross Domestic Product (GDP) figures, decreased by -0.1% MoM, below November’s 0.2%. Read more…