2024-01-15 22:54:04
GBP/USD » The currency pair to watch this week
Thanks to the Martin Luther King holiday, the foreign exchange markets were rather calm on Monday, without the participation of American banks. But things should start to improve from Tuesday. We will have macroeconomic data that might influence markets around the world later this week. Among these macroeconomic indicators, we will also have important UK data including CPI, wages and retail sales, making GBP/USD the currency pair to watch in forex this week.
- What’s next in forex for the British pound?
- UK wages, CPI and retail sales among key data
- GBP/USD technical analysis suggests uptrend intact
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What’s next in forex for the British pound?
Concerns regarding the UK economy have been mostly ignored by forex currency traders. They were happy to buy declines in the pound once morest all major currencies, particularly the underperforming commodity dollars. But even once morest the US dollar, the pound sterling has managed to hold up well.
The GBP/USD pair has spent several weeks consolidating strong gains made late last year, holding just below the 1.28 resistance level.
The reason why sterling has remained supported despite macroeconomic concerns in the UK is the fact that the Bank of England has remained in the hawkish camp compared to a growing number of other central banks which have recently become dovish. The BoE’s relatively more hawkish stance is due to comparatively higher inflation in the UK than in other major economies.
As a result, inflation data will be very important to watch this week, but don’t forget wages and other UK data either.
Macroeconomic data to watch
As mentioned, we will have important UK wages and inflation (and retail sales) data for December this week, which should provide more clarity on the Bank’s potential interest rate cuts from England. In the United States, notable data this week includes retail sales and consumer confidence on Friday.
Here are the key relevant macroeconomic events to watch this week:
Key levels to watch
The pair’s trend GBP/USD remains bullish given an upward 200-day moving average and the fact that the price remains well above this average. The 21-day exponential moving average is also above the 200-day simple moving average, meaning the trend is clearly bullish. The first line of defense for the bulls is around the 1.2700 area, where the 21-day EMA meets previous resistance and support. Below this level 1.2615.
Resistance lies at 1.2800, which has been a difficult issue to resolve. A convincing break above here should open the way for follow-on technical buying towards the next milestone at 1.3000.
Par Fawad Razaqzada, FOREX.com » Official site
Fawad is an experienced analyst, business educator and economist. He produces research and analytical content using his vast knowledge of the global economy and financial markets, which he has acquired over the last 12 years in the industry. Fawad specializes in forex, stock indices and commodity markets, using a combination of fundamental and technical analysis to provide actionable trade ideas and anticipate potential market movements. His macro commentary is regularly cited by major financial publications such as Archyde.com and Market Watch.
Disclaimer: The information and opinions contained in this report are provided for general information purposes and do not constitute an offer or solicitation with respect to the purchase or sale of forex contracts or CFDs. Although the information contained herein has been obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, and assumes no liability for any direct, indirect or consequential harm which may result from the fact that anyone relies on such information.
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