The Pound Sterling (GBP) is facing slight downward pressure against the US Dollar (USD) as expectations for a rate cut by the Bank of England (BoE) remain firm. Conversely, reduced speculation surrounding the possibility of the Federal Reserve (Fed) implementing rate cuts in June provides support to the US Dollar. This week, market participants are closely eyeing the release of US inflation data, which is expected to significantly impact Fed rate cut expectations.
In Monday's European session, the GBPUSD pair exhibited a slight decline but maintained a broad consolidation within a tight range above the 1.2600 level. Investors are awaiting the publication of the United States Consumer Price Index (CPI) data for March, scheduled for Wednesday. The outcome of the inflation data will offer more clarity on whether the Fed will initiate interest rate reductions starting in June.
Analyzing the 1-hour trading timeframe, the GBPUSD market is observed to be trading sideways within the value area. The range of the value area spans approximately 40 pips, with key resistance noted at 1.2644 and key support at 1.2606. The Exponential Moving Averages (EMA) 50 and 200 indicate a bullish sentiment, although the narrow distance between them suggests lukewarm bullish momentum. The oscillator indicators, including the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI), echo the sideways price action, with the MACD signal line hovering close to the zero line and the RSI near the 50% level. Furthermore, the contraction of both upper and lower Bollinger Bands supports the observation of sideways price movement.
Overall, the GBP/USD pair is currently trading sideways as investors await the US inflation data for further direction. The tight consolidation above the 1.2600 level indicates a cautious stance among traders, with potential shifts in sentiment depending on the outcome of the upcoming economic data release.
EUR, German Trade Balance
Actual 21.4B vs Forecast 25.1B vs Previous 21.4B
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