GBP: Trending Up Against USD, Sideways Against EUR

GBP: Trending Up Against USD, Sideways Against EUR

Talking Points:

  • GBP/USD will approaching continue to arise in a entrance week, that will be dominated by a assembly of a Bank of England’s financial process committee.
  • EUR/GBP, however, might continue to pierce sideways.
  • Also on tap: purchasing managers’ indexes for a UK in July.

Fundamental Forecast for GBP Neutral

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The Bank of England’s financial process cabinet will approaching leave a benchmark seductiveness rate unvaried during 0.25% Thursday and make no changes to possibly a £435 billion asset-purchase module or a £10 billion corporate-bond buying. However, a assembly could still have an impact on GBP/USD and EUR/GBP.

The MPC is approaching to opinion 6-2 to leave a UK’s financial settings where they are so a initial risk is that some-more than dual MPC members opinion for a rate rise. The second is that a tinge of a quarterly Inflation Report is hawkish and a third is that BoE Governor Mark Carney takes a tough line during his post-decision press conference.

This maybe means that a principal risk for GBP traders is a stronger British Pound that reinforces a stream ceiling trend in GBP/USD, caused mostly by a weaker US Dollar.

Chart: GBP/USD Daily Timeframe (Jan 2 to Jul 28, 2017)

GBP: Trending Up Against USD, Sideways Against EUR

Chart by IG

The design is rather different, though, for EUR/GBP, that has been relocating broadly laterally for a past week and shows small pointer of violation out possibly upwards or downwards.

Chart: EUR/GBP One-Hour Timeframe (July 20-28, 2017)

GBP: Trending Up Against USD, Sideways Against EUR

Chart by IG

The other vital information to be expelled in a entrance week are a UK purchasing managers’ indexes for July. Both a production index and a services index are foresee to be small altered so here a risk is uniformly balanced, with clever information given to support a Pound and diseased information joyless it.

— Written by Martin Essex, Analyst and Editor

To hit Martin, email him during martin.essex@ig.com

Follow Martin on Twitter @MartinSEssex

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