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Mar 09 - 11:55 AM

GBP/USD - COMMENT-Sterling Still Challenged Even After Claims Dent Hawkish Fed View

By Paul Spirgel  —  Mar 09 - 10:05 AM

GBP/USD rose on Thursday, extending earlier gains above 200-day moving average resistance to a session high of 1.1931 after above-forecast U.S. jobless claims tempered Fed rate-hike speculation, but only marginally, leaving plenty of work for sterling bulls.

Rate markets still assign a 66.3% chance to a 50bp Fed hike on March 22, Fed Funds futures projecting a rate peak of 5.62% in October, only slightly below Wednesday's high print of 5.69%.

Given the erratic correlation between claims data and payrolls it would be premature to draw significant conclusions based on higher claims data, especially since Thursday's data was not from the non-farm payrolls survey week.

Technically, sterling bulls have their work cut out.
A close above the 200-DMA at 1.1904 will help temper the current GBP bearish structure.
However, a close above 10-DMA resistance at 1.1964 and trendline resistance at 1.2029 will have a more lasting effect.

Fundamentally, BoE member rhetoric remains skewed to growth-creation rather than inflation-fighting, which may keep GBP/USD anchored near trend lows.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary


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