GBPUSD – Flat
An event to watch out for today:
16:00. USD – Consumer Confidence Indicator
GBPUSD:
The GBP/USD pair is trading with a slight positive bias in Tuesday’s Asian session, although it lacks follow-through buying and remains below the mid-1.2600s, or overnight swing high. The fundamental backdrop favors bearish traders and calls for some caution in the area of the recent bounce from 1.2475, or the five-week low reached last Friday.
Last week, Bank of England (BoE) Governor Andrew Bailey said that expectations of an interest rate cut this year are not unfounded. This came after two members of the Bank of England’s board of governors, who had previously favored a rate hike, changed their stance and decided to keep borrowing costs at 5.25%, which could continue to undermine the British Pound Sterling (GBP). The US Dollar (USD), on the other hand, paused the previous day’s corrective pullback from the vicinity of its monthly peak amid an upbeat outlook for the US economy. This contributes to limiting the upside for the Pound-Dollar pair.
Moreover, several Fed officials expressed concerns over stagnant inflation and stronger-than-expected US macroeconomic data. Thus, the President of FRB Atlanta Raphael Bostic expects a gradual slowdown in the US economy and inflation and suggests only one rate cut this year.
Trading recommendation: Watch the level of 1.2650, and if the rebound occurs, take Sell positions.
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