GBP/USD – Pound Climbs to 2-Month High, Investors Eye BoE Minutes

The British pound has headed lower in the Monday session. In North American trade, GBP/USD is trading at 1.4233, up 0.72% on the day. On the release front, there are no major events. We’ll hear from three FOMC members – William Dudley, Loretta Mester and Randal Quarles. Japan will release an inflation indicator, the Services Producer Price Index. This inflation indicator is expected to remain unchanged at 0.7%. On Tuesday, the Bank of England releases the minutes of last week’s meeting and the US publishes CB Consumer Confidence.

Will the BoE minutes show a hawkish stance from policymakers? If so, the pound rally could continue.  The bank kept interest rates at 0.50% at last week’s meeting.  The markets had expected a unanimous decision to maintain rates at 0.50%, but two of the nine members voted in favor of immediately raising rates. The language of policymakers has become increasingly hawkish, and the MPC vote is another signal that there is a strong likelihood that the BoE will press the rate trigger come May.

GBP/USD Fundamentals

Monday (March 26)

  • 4:30 British High Street Lending. Estimate 39.2. Actual 38.1
  • 12:30 US FOMC Member William Dudley Speaks
  • 16:30 US FOMC Member Loretta Mester Speaks
  • 19:10 US FOMC Member Randal Quarles Speaks

Tuesday (March 27)

  • 4:30 British FPC Minutes
  • 8:30 US Core Durable Goods Orders. Estimate 0.5%
  • 8:30 US Durable Goods Orders. Estimate 1.6%
  • 10:00 US New Home Sales.  Estimate 621K

*All release times are GMT

*Key events are in bold

GBP/USD for Monday, March 26, 2018

GBP/USD March 26 at 12:15 EDT

Open: 1.4133 High: 1.4245 Low: 1.4131 Close: 1.4235

 

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.4010 1.4128 1.4227 1.4345 1.4452 1.4518

GBP/USD continues to break through resistance lines. The pair was flat in the Asian session. GBP posted strong gains in European trade and has steadied in the North American session

  • 1.4227 has switched to a support role following gains by GBP/USD. It is a weak line
  • 1.4345 is the next resistance line
  • Current range: 1.4227 to 1.4345

Further levels in both directions:

  • Below: 1.4227, 1.4128, 1.4010 and 1.3901
  • Above: 1.4345, 1.4452 and 1.4518

OANDA’s Open Positions Ratio

In the Monday session, GBP/USD ratio is showing long and short positions are evenly split. This is indicative of a lack of trader bias towards GBP/USD.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.