GBP / USDPRINCIPLE ATTENTION:
- GBP is recovering in full
- BoE and NFP significant data points
Pound improved throughout the week, larger pairs of nails tested significant psychological levels. Although the weaknessFOMC played a major role for the pound sterlingUSD, bond spreads have also moved in favor of cable. As widely expected, Fed’s meeting did not help rock the boat and remained largely with the scenario, albeit with some minor changes. It saidmy view remains that some excitement can be expected at next month’s Jackson Hole Symposium, which is quite a good time, as it would mark the anniversary of the announcement of the average inflation target.
GBP / USD Stops short at Familiar Resistance
Looking to the future, two prominent data points attract the attention of market participants – the BoE decision on Thursday and the NFP on Friday. No policy change is expected for the Bank of England, but as the gap between pigeons and hawks begins to emerge in the Committee, it will increase the focus on the accompanying statement and economic forecasts. Given that the risks of the Delta option are reduced due to a successful vaccination program, the BoE may start to show more signs of optimism and thus support the currency. Elsewhere, when the Fed reduces QE almost firmly, the focus is instead on when the announcement comes, and this is where NFP data is key.
GBP / USD: The pair has once again stopped at familiar resistance, but if the pounds are back above 1.3900, it seems that the declines are likely to find support before the BoE’s decision. However, more than 1.4000 are needed to strengthen the bulls.
EUR / GBP: The psychological handle of the 0.8500 handle is still terrible, although the downward pressure is likely to persist with a pause that opens the doors to 0.8470-80. The preferred view is fading rallies from 0.88600.
EUR/ GBP chart: daily schedule