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Jun 21 - 11:55 AM

GBP/USD - COMMENT-Sterling Rises Off 9-Week Low, Bulls Eye Hawkish MPC Lean Thursday

By Paul Spirgel  —  Jun 21 - 09:40 AM

GBP/USD rebounded from earlier losses on Monday, rising 0.56% on the day to 1.3875 and up 9-week lows sub-1.38 overnight with the help of profit taking, while sterling bulls also looked ahead to the upcoming BoE meeting for help.

Sterling went into retreat last week after the Fed delivered a hawkish message after its policy meeting, adding to cable's troubles related to COVID and post-Brexit UK-EU trade concerns and pushing it below key Fib support at 1.3960 and cloud and lower daily Bolli support by 1.3900.

In the wake of the Fed, sterling bulls are pinning their hopes on Thursday's BoE meeting, looking to the MPC to keep pace with the Fed in terms of policy normalization planning.
If the BoE delivers, cable could possibly mount a new assault on
recent trend highs above 1.42.

Today's sterling gain, aided by GBP/USD shorts booking profits on the move from its June 1 high at 1.4250 to lows by 1.3786 after U.S. 10-year yield slipped to 4-month lows overnight.

A steady, or dovish BoE lean would probably lead to further GBP/USD long unwinds, putting early April, late March lows near 1.3670 in focus.

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Refinitiv IFR Research/Market Commentary


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