Sterling Continues to Outshine US Dollar
UK Political Optimism
GBPUSD remains in the green so far today with the British Pound one of the best performers against USD in recent days. The pair is now on course for its seventh straight day in the green, boosted by reduced political uncertainty in the UK and a slightly softer US Dollar. In the UK, expectations that Andy Burnham will take over as UK PM look to be accompanied by general enthusiasm, or at least a lack of concern. Burnham confirmed this week that he will stick to the government’s fiscal rules, diluting fears that he’ll ramp up spending if he takes office. Bullish GBP sentiment here suggests that traders are generally favourable towards Burnham and the Pound looks poised to continue higher near-term unless we see a fresh spike in USD near-term.
NFPs & USD
Last week’s softer-than-forecast NFP results have dented hawkish Fed expectations a little with market pricing for a hike by year end dropping from around 85% pre-data to around 75% currently. Any further incoming data weakness should see that pricing slipping further, in which case GBPUSD stands to continue gaining ground. However, there are near-term risks tomorrow with the June FOMC mins likely to see some hawkish sentiment expressed which could help drive USD higher through the back end of the week, capping the rally in Sterling for now.
Technical Views
GBPUSD
The rally in GBPUSD has seen price bouncing sharply off the 1.3165 level, now back inside the triangle pattern which was broken to the downside mid-June. The next big test for bulls is the 1.3446 level (and triangle highs just above), bulls need to see a break above here to prevent a fresh downturn back towards 1.3165.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.