Explore eFXplus Derived Data That Drive Results
A Data Partner of:
Refinitiv
May 24 - 11:55 PM

GBP/USD - COMMENT-Sterling To Top Out Around 1.2600, Into A Tough Summer

By Andrew M Spencer  —  May 24 - 10:05 PM

Sterling has run into resilient resistance at 1.2600 this week. Economic data and the broad UK outlook suggest technical resistance at 1.2590-1.2640 may cap the May rebound.

Tuesday's disappointing fall in May PMIs increased fears of an economic slowdown nL2N2XG0LM. OIS markets BOEWATCH responded by pricing the Bank of England's December 2022 rate at around 2.13% from 2.25% pre-data nL2N2XG11J.

Inflation fears undermine UK business and consumer confidence.
Ofgem, the UK energy industry regulator, warned of a potential 40% hike in energy costs for October, which will hit the economy and lower-income workers hard nL5N2XG3J6.

The outlook encourages union attempts to achieve wage rises in line with inflation.
The rail union is ready to strike nL2N2XG2KD, and they are unlikely to be alone.
Meanwhile 'partygate' drags on, undermining faith in the political system nL5N2XG3RX.

The BoE's handling of the surge in inflation has come under significant criticism, as Governor Andrew Bailey justifies the bank's actions nL5N2XF4HF.

All these factors point to a tough period for the UK economy and sterling.

Technically, GBP/USD momentum studies are mixed, 5, 10 and 21-day moving averages conflict, while 21-day Bollinger bands contract.
Conflicting signals suggest range trading, with a potential range top at 1.2590-40 after May's 3% bounce; 1.2592, 38.2% of the March-May fall was tested, but held on the close, and the 1.2637 May range high is likely to be stubborn resistance. The 1.2156 2022 trend low is the potential range base.

For more click on FXBUZ


gbp 2 May 25 Click here

Source:
Refinitiv IFR Research/Market Commentary

Subscription

  • eFXplus
  • End-user license agreement (EULA)

About

  • About
  • Contact Us

Legal

  • Terms of Service
  • Privacy Policy
  • Disclaimer
© 2022 eFXdata · All Rights Reserved
!