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Feb 26 - 11:55 AM

GBP/USD - COMMENT-Sterling Inverted Hammers Hint Traders Turning Bullish

By Paul Spirgel  —  Feb 26 - 10:15 AM

Traders appear to have lost interest in testing the lower end of GBP/USD's 1.2788-1.2518 range, and recent inverted hammer formations suggest they may now try to push it in the other direction.

GBP/USD firmed near recent 3-week highs by 1.27 in early NorAm trade, supported by the inverted hammers on the charts for the last three days.

Rate fundamentals also bolstered support for the pound.

The dollar's ability to strengthen on declining Fed rate cut expectations has diminished now that the projections of the futures market have become more closely aligned to FOMC poliymakers' December dot plot.

Less dour UK economic data has also helped the pound by tamping down dovish sentiment that followed the most recent BoE meeting, a view supported by comments from MPC members indicating that the fight against inflation continues.

Markets are now awaiting U.S. and UK employment, wages and price data to refine interest rate expectations.
Fed and BoE rate announcements on March 20 and 21 are expected to yield no change in rates, but investors will scrutinize statements for near-term policy clues.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary

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