GBP Trading Outlook
The Sterling (GBP) the GBP/USD broke 1.5450 overnight and closed under the figure but the follow-through selling was mild and we are sitting just under the key support as we enter European trade on Friday. Some support is being seen from EUR/GBP selling but the main driver is stocks which are trending lower lately. The ongoing Libor banking scandal is also threatening to damage the UK banking sector and not helping sentiment at all. Looking ahead, no data tonight.
The Sterling (GBP) the GBP/USD reversed a rally from 1.5570 to 1.5500 after the FOMC minutes threw cold water on QE3 hopes. The lack of EUR/USD support is weighing on the GBP which had been developing some bullish feel in the previous few weeks. A break of 1.5450 would put 1.5000 back into the radar and encourage further attempts lower. Looking ahead, May Industrial Production forecast at 0.0% vs. -0.8% previously. Also ECB President Draghi speaks today.
The Sterling (GBP) Economic data in the UK was stronger than expected but weak US stocks meant little fresh direction for GBP/USD. EUR/GBP managed to fall below 0.7900 but there was little follow through. Looking ahead, German CPI is forecast at -0.1% in June m/m.
The Sterling (GBP) tracked the EUR/USD higher back above 1.5500 to 1.5530 resistances. Last week’s BOE moves have been priced in but there are still some downside risks. EUR/GBP targets 0.7900 but could bounce if the market changes mood on the EUR/USD. Also ahead, May Industrial Output forecast at -0.2% vs. 0%. May Trade Balance forecast at -9bn vs. -10.1bn previously.
The Sterling (GBP) the USD strength on Friday sent Cable to its final big support at 1.5450. The outlook is for more USD strength unless there is FED easing or the EUR/USD can find support. EUR/GBP is a source of constant support but this cannot continue forever. Also ahead, ECB President Draghi and UK MPC member Tucker are scheduled to speak.
Go to The Sterling (GBP) Archive





