- GBP/USD awaits the outcome of this week's crucial central bank meetings.
- GBP/USD holds above 200 EMA despite firmer US dollar.
It is a critical week for GBP/USD traders as we have both the Bank of England and the Federal Reserve central bank meetings. At the time of writing, GBP/USD is moving sideways in a consolidated market, hugging a bullish 200 EMA channel, albeit pressured by a firm US dollar as investors survey the conditions of the market's risk profile.
GBP/USD hit fresh lows on Friday as some investment banks brought forward their forecast for a Bank of England rate rise. The general consensus is that while the BoE's rate-setters could be seen to be on the verge to vote for an early end to their COVID-19 stimulus plans, they are likely to hold off for now.
''Inflation is higher and the labour market tighter than the MPC expected in its August MPR,'' analysts at TD Securities explained.
''While we don't look for a change in policy itself (or even much of a change in the outlook), the MPC (with two new members) will find it hard to ignore these developments. A constructive tone is therefore likely, reinforcing market expectations of a 2022 hike.''
US dollar on firmer grounds ahead of Fed
Meanwhile, the US dollar climbed to three-week peaks on Friday, still benefiting from better-than-expected US Retail Sales data released on Thursday. the data lifted prospects of a hawkish tilt at this week's Fed meeting and it is expected that officials will likely signal that they are almost ready to taper.
''We expect a formal announcement in Dec, not Nov, but will reassess after the meeting,'' the analysts at TD Securities said. 'While median 2022-23 dot-plot projections will likely be unchanged, the math makes any changes more likely to be up than down. Median inflation/growth projections for 2021 will have to be raised/cut.''
GBP/USD technical analysis
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
GBP/USD stays weak near 1.2400 after UK Retail Sales data
GBP/USD stays vulnerable near 1.2400 early Friday, sitting at five-month troughs. The UK Retail Sales data came in mixed and added to the weakness in the pair. Risk-aversion on the Middle East escalation keeps the pair on the back foot.
EUR/USD extends its downside below 1.0650 on hawkish Fed remarks
The EUR/USD extends its downside around 1.0640 after retreating from weekly peaks of 1.0690 on Friday. The hawkish comments from Federal Reserve officials provide some support to the US Dollar.
Gold: Middle East war fears spark fresh XAU/USD rally, will it sustain?
Gold price is trading close to $2,400 early Friday, reversing from a fresh five-day high reached at $2,418 earlier in the Asian session. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row.
Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’
Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.
Israel vs. Iran: Fear of escalation grips risk markets
Recent reports of an Israeli aerial bombardment targeting a key nuclear facility in central Isfahan have sparked a significant shift out of risk assets and into safe-haven investments.