GBP/USD Preserves Bearish Sequence Ahead of Bank of England (BoE) Rhetoric

FX TALKING POINTS:

GBP/USD Preserves Bearish Sequence as U.K. Retail Sales Narrows in March. Bank of England (BoE) Rhetoric in Focus.

NZD/USD Eyes Monthly-Low (0.7195) as New Zealand Consumer Price Index (CPI) Slows. Relative Strength Index (RSI) Flashes Bearish Signal.

DailyFX Table

GBP/USD PRESERVES BEARISH SEQUENCE AS U.K. RETAIL SALES NARROWS IN MARCH. BANK OF ENGLAND (BOE) RHETORIC IN FOCUS.

GBPUSD Table

GBP/USD slipped to a uninformed weekly low (1.4161) as updates to a U.K. Retail Sales news showed a 0.5% decrease in March, and a span stays during risk of confronting a incomparable pullback as it extends a array of reduce highs lows from progressing this week.

The new collection of muted information imitation should keep a Bank of England (BoE) on a sidelines during a subsequent assembly on May 10 as ‘the solid fullness of tardy has reduced a grade to that it is suitable for a MPC to accommodate an extended period of acceleration above a target,’ and uninformed comments from house members Jon Cunliffe and Michael Saunders might keep a British Pound underneath vigour if a officials mostly validate a wait-and-see for financial policy.

However, a slew of hawkish comments might quell a new debility in GBP/USD as a Monetary Policy Committee (MPC) appears to be on courses to exercise aloft borrowing-costs over a entrance months, and a executive bank might boost a bid ready U.K. households and businesses for another rate-hike as ‘an ongoing tightening of financial process over a foresee duration will be suitable to lapse acceleration sustainably to a aim during a some-more required horizon.

With that said, a broader opinion for GBP/USD stays constructive as both cost and a Relative Strength Index (RSI) mostly lane a bullish trends carried over from a prior year, and a broader change in pound-dollar function might continue to reveal in 2018 as a BoE alters a trail for financial policy.

For some-more in-depth analysis, check out a Q2 Forecast for GBP/USD

GBP/USD DAILY CHART

GBPUSD Daily Chart

  • Near-term opinion for GBP/USD stays capped by a Fibonacci overlie around 1.4310 (61.8% expansion) to 1.4350 (78.6% retracement), with a span during risk for a incomparable pullback as it extends a bearish method from progressing this week.
  • The 1.4100 (100% expansion) hoop stays on a radar, with a break/close subsequent a settled turn opening adult a subsequent segment of seductiveness around 1.3970 (50% expansion), that lines adult with a Apr low (1.3965).

NZD/USD EYES MONTHLY-LOW (0.7195) AS NEW ZEALAND CONSUMER PRICE INDEX (CPI) SLOWS. RELATIVE STRENGTH INDEX (RSI) FLASHES BEARISH SIGNAL.

NZDUSD Table

NZD/USD stays underneath vigour as New Zealand’s Consumer Price Index (CPI) slows to an annualized 1.1.% from 1.6% in a fourth-quarter of 2017, and a span might continue to give behind a allege from a April-low (0.7195) as a bullish movement appears to be abating.

The second uninterrupted decrease in a title reading for acceleration is expected to daunt bets for aloft seductiveness rates even as Governor Adrian Orr takes a helm, and a Reserve Bank of New Zealand (RBNZ) might keep a record-low money rate via 2018 amid a ongoing reforms during a executive bank.

With that said, Governor Orr might merely hang to a stream book during his initial rate preference on May 10, with a New Zealand dollar during risk of confronting as incomparable improvement over a near-term as a Relative Strength Index (RSI) flashes a bearish signal.

NZD/USD DAILY CHART

NZDUSD Daily Chart

  • NZD/USD continues to carve a bearish method following a unsuccessful try to hold/close above a 0.7330 (38.2% retracement) to 0.7370 (23.6% retracement), with a span during risk for serve waste as a RSI snaps a ceiling trend from March.
  • The Fibonacci overlie around 0.7240 (61.8% retracement) to 0.7260 (38.2% retracement) sits on a radar, with a break/close subsequent a settled segment lifting a risk for a pierce behind towards 0.7170 (50% retracement) to 0.7200 (38.2% retracement), that lines adult with a monthly-low (0.7195).

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— Written by David Song, Currency Analyst

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