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Mar 28 - 11:55 AM

GBP/USD - COMMENT-Sterling Eyes Trend Lows; Capped By Holiday Liquidity, Waller Comments

By Paul Spirgel  —  Mar 28 - 10:10 AM

GBP/USD remained anchored near the lower end of its recent 1.2576-1.2676 range in early NorAm trading, bounded loosely by 200-DMA support at 1.2590 and the daily cloud top resistance at 1.2663, and is likely to remain weak after soft UK GDP data and hawkish comments by the Fed's Christopher Waller.

The pound is also coming under slight pressure ahead of the upcoming Good Friday holiday, month and quarter-end and Friday's PCE data, as traders gravitate to the safety of the U.S. dollar.

With recent Fed musings indicating comfort with a high-for-longer policy path, UK data and central bank voting suggesting a less hawkish BoE policy path in 2024, this year's early GBP/USD highs by 1.29 are likely to cap cable as recent longs predicated on a BoE rate path relatively higher than the Fed are unwound.

While the pound is likely to remain on the backfoot amid soft UK data and reduced BoE rate expectations, GBP/USD's fall is likely to remain measured, assuming the BoE does not signal an overtly dovish rate tack while inflation remains considerably above target.

Below the recent trend low at 1.2576, support comes in at 1.2518, the Feb.
5 2024 low, and the Nov.
20 weekly low at 1.2448.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary


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