Yahoo Finance GBP/USD Daily Price Forecast – GBP/USD Tests 1.269 Handle Ahead of UK CPI Data
Asia experienced a major turnaround in risk sentiment after the Turkish Lira and Chinese Yuan resumed its recent declines, triggered a wave of risk-aversion across the financial markets. The US dollar regained poise versus its main rivals and reached the highest levels since June 2017 just under the 97 handle. This resulted in GBPUSD pair testing 1.269 handle backed by strong positive sentiment surrounding US Greenback but investors continue to focus on UK’s macro data scheduled for the day which helped the pair move back into 1.27 handle. As of writing this article, the pair is trading at 1.2706 down 0.15% on the day. Brexit headlines continue to lean heavily into alarming territory, with more and more warnings flashing that the UK could be heading for an outright hard Brexit, with odds of a messy exit shooting up recently with the UK parliament’s Conservative Brexiteers threatening to outright reject any trade deal presented by the Chequers.
Investors Focus on UK’s Macro Data As Pair Moves Back Above 1.27 Handle
GBP traders will be tense with the Pound waffling near a critical level with the UK’s latest inflation figures due early in the London Wednesday market session. A new 14-month low for the GBP/USD sees buyers still sitting on the sidelines. While overall trend remains downside for GBPUSD, the pair breached 1.28 handle and held level above 1.27 handle for quite some time in Tuesday’s trading session as Turkish lira got a bit of a reprieve which indicates that GBP bulls are waiting for a strong enough trigger to move back into uptrend movement. A better than expected readings in UK’s macro during the next 48 hours could help pair turn 1.27 handle as a stable support and aim for 1.29 handle. However brexit woes which continue to plague UK’s market could drag the pair below 1.25 in case the negotiations set to begin tomorrow takes a turn for worse. US Greenback which is currently the strongest currency is world market could add further influence to pair’s downside movement which makes the current market situations a “double whammy”.
On the macroeconomic side, the UK’s unemployment rate fell to 4.0% yesterday, a forty-three year low for the indicator, though the rest of the UK’s job report was notably less cheery, with the number of people not working and not looking for work increasing by more than expected, while earnings also missed market expectations. Today at 08:30 GMT will see the UK’s latest CPI reading, and markets are expecting a slight improvement to 2.5% for the year into June, versus the previous reading came in at 2.4%, while the US side will be seeing US Retail Sales at 12:30 GMT, which are expected to tick lower to 0.3% from 0.4%. From technical perspective, the Sterling is “looking poised to extend its decline in the upcoming sessions, as in the 4 hours chart, technical indicators resumed their declines, the Momentum after failing to re-enter positive territory, and the RSI now heading south around 30. The same chart shows a failed attempt to recover above a bearish 20 SMA, which maintains its sharp bearish slope”. Expected support and resistance for the pair are at 1.2680, 1.2645, 1.2610 and 1.2755, 1.2795, 1.2830 respectively.
This article was originally posted on FX Empire
