The GBPJPY pair attempted to record some extra gains by hitting 200.75 level, to return to settle below 200.40 barrier, to obstacle the chances for resuming the bullish attack.
Therefore, we will keep the bearish correctional scenario, gathering the negative momentum makes us expect declining towards 198.60 directly, then attempts to press on the support near 197.80, while the price success in confirming breaching the barrier will allow it to renew the bullish attempts, to expect its rally towards 201.55, forming the next positive target of the bullish scenario.
The expected trading range for today is between 198.60 and 200.40
The GBPJPY pair attempted to record some extra gains by hitting 200.75 level, to return to settle below 200.40 barrier, to obstacle the chances for resuming the bullish attack.
Therefore, we will keep the bearish correctional scenario, gathering the negative momentum makes us expect declining towards 198.60 directly, then attempts to press on the support near 197.80, while the price success in confirming breaching the barrier will allow it to renew the bullish attempts, to expect its rally towards 201.55, forming the next positive target of the bullish scenario.
The expected trading range for today is between 198.60 and 200.40
The GBPJPY pair attempted to record some extra gains by hitting 200.75 level, to return to settle below 200.40 barrier, to obstacle the chances for resuming the bullish attack.
Therefore, we will keep the bearish correctional scenario, gathering the negative momentum makes us expect declining towards 198.60 directly, then attempts to press on the support near 197.80, while the price success in confirming breaching the barrier will allow it to renew the bullish attempts, to expect its rally towards 201.55, forming the next positive target of the bullish scenario.
The expected trading range for today is between 198.60 and 200.40
GBP/USD continues to push higher after closing in positive territory on Monday.
The pair could extend the uptrend once 1.3640 is confirmed as support.
The Fed’s two-day policy meeting will start later in the day.
GBP/USD benefits from the broad-based selling pressure surrounding the US Dollar (USD) and trades at its highest level in over two months above 1.3630. As markets gear up for the Federal Reserve’s (Fed) critical policy meeting, the USD could have a hard time gathering strength and allow GBP/USD to cling to its bullish stance.
Pound Sterling Price This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the US Dollar.
USD
EUR
GBP
JPY
CAD
AUD
NZD
CHF
USD
-0.62%
-0.60%
-0.41%
-0.51%
-0.35%
-0.33%
-0.61%
EUR
0.62%
0.05%
0.16%
0.12%
0.32%
0.26%
0.00%
GBP
0.60%
-0.05%
0.16%
0.06%
0.27%
0.20%
-0.16%
JPY
0.41%
-0.16%
-0.16%
-0.12%
0.11%
0.07%
-0.20%
CAD
0.51%
-0.12%
-0.06%
0.12%
0.27%
0.14%
-0.23%
AUD
0.35%
-0.32%
-0.27%
-0.11%
-0.27%
-0.06%
-0.35%
NZD
0.33%
-0.26%
-0.20%
-0.07%
-0.14%
0.06%
-0.36%
CHF
0.61%
-0.01%
0.16%
0.20%
0.23%
0.35%
0.36%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
In the American session on Monday, the positive shift in risk mood weighed on the USD. Moreover, growing expectations for a dovish Fed outlook following White House economic adviser Stephen Miran’s confirmation to join the Federal Reserve Board and vote at the upcoming meeting hurt the currency further.
Early Tuesday, the UK’s Office for National Statistics (ONS) announced that the ILO Unemployment Rate remained unchanged at 4.7% in the three months to July, as anticipated. In this period, annual wage inflation, as measured by the change in the Average Earnings Excluding Bonus, edged lower to 4.8% from 5% to match the market expectation. These figures were largely ignored by market participants.
The US Census Bureau will release Retail Sales data for August later in the day. Although a stronger-than-expected increase in this data could help the USD show some resilience with the immediate reaction, investors could refrain from taking large positions.
In the meantime, US stock index futures trade modestly higher in the European session. In case the market mood remains upbeat after a bullish opening in Wall Street, the USD is likely to remain under bearish pressure.
GBP/USD Technical Analysis
The Fibonacci 78.6% retracement of the latest downtrend aligns as an immediate resistance level at 1.3640. In case GBP/USD rises above this level and starts using it as support, 1.3700 (static level, round level) could be seen as the next hurdle before 1.3770 (static level, beginning point of the downtrend).
Looking south, support levels could be spotted at 1.3600 (static level, round level), 1.3540 (Fibonacci 61.8% retracement) and 1.3500 (static level, 100-period Simple Moving Average).
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data.
Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates.
When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money.
When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP.
A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
The US dollar has been at the forefront of what most people have been paying attention to and not only the Forex markets, but markets in general.
So, with that being said, I think you’ve got a scenario where it’s not overly surprising that there has been a lot of choppiness against the yen.
After all, this is a great way to show signs of where the U.S. dollar might go over the longer term and risk appetite on the whole. The Japanese yen, of course, is a major risk appetite measure. The Japanese yen is considered to be a safety currency. That being said, this week is going to be particularly interesting, mainly due to the fact that markets are going to be watching the Federal Reserve.
The Wednesday Federal Reserve interest rate decision, I think, will end up being a major market mover, not necessarily for the 25 basis points rate cut, but the concerns that the Federal Reserve shows, or for that matter, doesn’t show. If they don’t seem overly concerned about the market, that could change things. It might send the dollar higher based on the idea that they won’t cut as much.
If there is Fear at the Fed
On the other hand, if they are in a situation where it appears that they are a bit concerned, then I think it would make a lot of sense for the U S dollar to strengthen against most currencies. Although this one could be the outlier in the sense that we could just see more sideways action as traders prefer both the US dollar and the Japanese yen over most other currencies and that could very well be how this plays out. We just go sideways and grind back and forth collecting swap. That being said, we are in a range right now with the 50-day EMA and the 200-day EMA indicators right about where price is and the 149 yen level above as a major resistance barrier and the 146.50 yen level underneath as a major support level.
In other words, I think we’re about as close to fair value and balance as you can get. This is a very neutral pair. It will be noisy on Friday and then we’ll really start to know what’s going to happen, I think on Thursday.
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
The British pound is trying to break out against the US dollar during Monday trading as it looks like we are in fact going to continue to be very noisy.
You do have to keep in mind that we have an interest rate decision from both of these central banks, the United States and England this week. And that in and of itself could cause quite a bit of volatility.
With this, I think you also have to recognize that we are in a scenario where traders are trying to sort out whether or not the Federal Reserve cutting rates is a good thing or if it is a bad thing.
Generally speaking, most stock traders and forex traders look at rate cuts as a good way to short the dollar. The question at this point is going to be more along the lines of “Is there something ugly out there that the Federal Reserve knows that we don’t?” That’s always the fear. Ultimately though, you’ll also have to pay attention to London on Thursday.
A Noisy Market Ahead
So, I think this ends up being a very noisy market. I do think it favors the upside as things stand right now. And if we can get a sustained break above the 1.36 level, we could very well see the market try to get to the 1.38 level, but we also probably will see the occasional erratic and violent pullback.
So that is something to be cognizant of. If we do pull back, I would anticipate the 50 day EMA offering support, which is at the 1.3477 level. And then after that, you would have support at the 1.34 level. In general, I like buying dips, but you never know. The Federal Reserve could spook the market, so be very cautious.
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
Despite the positive momentum in the last trading, the GBPJPY pair price keeps providing weak sideways trading, affected by the stability of the barrier at 200.40, which decelerates the chances of resuming the bullish attack until this moment.
We will keep the bearish correctional track, depending on the stability of the barrier, reminding you that the correctional targets are located near 198.60 and 197.85, while breaching the barrier and holding above it will open the way for recording new gains that might extend to 201.55 reaching 161.8%Fibonacci extension level near 202.45.
The expected trading range for today is between 198.60 and 200.40
GBP/USD climbs as Fed-BoE policy divergence favors Sterling
The Pound Sterling (GBP) advances during the North American session on Monday as traders are set to digest monetary policy meetings by major central banks across the Atlantic. Expectations for the first rate cut by the Federal Reserve (Fed) in nine months, and the Bank of England (BoE) keeping rates unchanged, would likely underpin the British currency. Read More…
Pound Sterling gains against US Dollar ahead of Fed-BoE policy outcome
The Pound Sterling (GBP) advances against the US Dollar (USD) at the start of the week during the European trading session. The GBP/USD pair jumps to near 1.3600as the US Dollar faces selling pressure, with investors awaiting monetary policy announcements by the Federal Reserve (Fed) and the Bank of England (BoE) on Wednesday and Thursday, respectively. Read More…
The GBP/USD pair posts modest gains near 1.3555 during the early Asian session on Monday. Traders expect the US Federal Reserve (Fed) to deliver its first rate cut of the year at its policy meeting on Wednesday, which might weigh on the US Dollar (USD). Later on Monday, the New York Empire State Manufacturing Index for September will be released. Read More…
The US dollar is down ever so slightly against the Japanese yen in early trading, but we are stuck between the 50 day EMA and the 200 day EMA. If the market were to break to the upside, we could go looking to the 149 yen level. If we break down from here, the 146.50 yen level continues to offer support. I expect very sideways action here.
AUD/USD Technical Analysis
The Australian dollar is a little bit stronger in the early trading hours of Monday. We are approaching a significant swing high near the 0.67 level, so we may hesitate a bit here, but clearly over the last week or so, we’ve seen the Australian dollar outperform many of its contemporaries. And therefore, I think if things play out the way they have been, we’ll continue to see the Aussie grind to the upside, breaking the 0.67 level could really free it to go much higher. We’ll just have to wait and see. However, do keep in mind that Federal Reserve cutting rates a lot of times signals the end of good times. And if that’s the case, you may suddenly see the US dollar reverse.
I’d be very careful with that. A lot of this is going to come down to the press conference and how fearful the Federal Reserve sounds. If we do pull back at this point, keep an eye on that 0.6550 level. It’s been like a magnet for price. And at this point in time, it’s basically where I think the market’s most comfortable. That could change. We certainly have made a strong push to the upside. We’ll just have to see if it holds.
For a look at all of today’s economic events, check out our economic calendar.
The GBP/USD outlook shows a rally in the pound as traders await key policy decisions.
The dollar fell last week after data revealed an unexpected jump in unemployment claims.
The Bank of England has grown more cautious amid high inflation.
The GBP/USD outlook shows a rally in the pound as traders await policy decisions in the US and the UK. After downbeat employment figures, the Fed is set to cut rates by 25-bps. Meanwhile, the Bank of England will likely keep interest rates unchanged.
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The dollar fell last week after data revealed an unexpected jump in unemployment claims. It was the last nail in the coffin that pointed to a deteriorating labor market in need of support. Meanwhile, inflation was slightly hotter-than-expected. Nevertheless, it was not enough to dampen Fed rate cut expectations.
This week, traders will wait to see the tone during the meeting to determine future policy moves. If policymakers are more dovish than expected, the dollar will collapse. Meanwhile, if they remain relatively cautious about rate cuts, the US currency could recover.
On the other hand, the Bank of England has grown more cautious amid high inflation. As a result, traders expect policymakers to keep interest rates unchanged. This is giving the pound an edge over most of its peers, especially the dollar. However, there is uncertainty about the UK’s financial health. Market participants are keeping an eye on the upcoming November budget for clues on the country’s financial outlook.
GBP/USD key events today
Traders are not anticipating any high-impact economic releases today. Therefore, they will keep an eye on upcoming central bank meetings.
On the technical side, the GBP/USD price is on the verge of closing above the 1.3575 key resistance level. Such an outcome would make a higher high, confirming a continuation of the previous uptrend. Moreover, the price trades above the 30-SMA, with the RSI nearing the overbought region, suggesting solid bullish momentum.
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Initially, the price was trading in a bullish trend before pausing near the 1.3575 resistance level. After this, I entered a corrective phase where it was chopping through the 30-SMA. However, the corrective move found support near the 1.3350 level. Afterwards, bulls took charge, pushing the price above the 30-SMA and respecting it as a support.
The break above the 1.3575 level shows that bulls are ready to resume the previous uptrend. Therefore, GBP/USD could soon retest higher resistance levels.
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