21 Jul 2015
GBP/USD: BoE minutes key event this week
FXStreet (Guatemala) - GBP/USD is currently at 1.5561 with high of 1.5628 and a low of 1.5537.
GBP/USD has been a strong performer over the last 10 days, digging out of the 1.5330 downside territory and turning a minor rebound in to a convincing rally of over 340 pips to 1.5673 on the back of a hawkish Carney and speculation of a rate hike in 2016 from the BoE.
As per the latest Reuters survey 60% of respondents see a UK rate hike coming by the end of Q1 2016, up from 55% in the last poll. For this week, we await the 9th July MPC minutes and votes. Carney's recent hawkish commentary will have drawn a great deal of market attention and the minutes will be under the spotlight. Analysts at Scotiabank pointed out from his commentary that, "Governor Carney recently noted that over the next three years, he thinks the BoE’s policy rate will rise to half the historic average." Also, the UK releases retail sales for June which have been performing strongly over the last couple of months.
GBP/USD technically bearish near term
GBP/USD technically has the downside in favour on the short term charts and Valeria Bednarik, chief analyst at FXStreet explained that the price stands below a bearish 20 SMA, whilst the technical indicators head lower below their mid-lines. "In the 4 hours chart, the price is, however, above its 200 EMA, while the 20 SMA also heads lower above the current price and the technical indicators stand in negative territory, limiting chances of a stronger advance at the time being."
GBP/USD has been a strong performer over the last 10 days, digging out of the 1.5330 downside territory and turning a minor rebound in to a convincing rally of over 340 pips to 1.5673 on the back of a hawkish Carney and speculation of a rate hike in 2016 from the BoE.
As per the latest Reuters survey 60% of respondents see a UK rate hike coming by the end of Q1 2016, up from 55% in the last poll. For this week, we await the 9th July MPC minutes and votes. Carney's recent hawkish commentary will have drawn a great deal of market attention and the minutes will be under the spotlight. Analysts at Scotiabank pointed out from his commentary that, "Governor Carney recently noted that over the next three years, he thinks the BoE’s policy rate will rise to half the historic average." Also, the UK releases retail sales for June which have been performing strongly over the last couple of months.
GBP/USD technically bearish near term
GBP/USD technically has the downside in favour on the short term charts and Valeria Bednarik, chief analyst at FXStreet explained that the price stands below a bearish 20 SMA, whilst the technical indicators head lower below their mid-lines. "In the 4 hours chart, the price is, however, above its 200 EMA, while the 20 SMA also heads lower above the current price and the technical indicators stand in negative territory, limiting chances of a stronger advance at the time being."