Last week, Monday and Tuesday were bullish for Cable after PMI data from the UK came out higher than investors had expected. The rest of the week saw the pair closing lower for several reasons.
Next week will be a busy week for GBP/USD as there will be important news releases from the US and the UK. Investors will be paying attention to the UK’s gross domestic product data, which is expected to drop. There will also be a job report from the UK showing the employment change for March and the unemployment rate for April. Finally, the Bank of England is expected to raise interest rates by 25bps.
In the United States, investors expect the Federal Reserve to raise interest rates by 50-bps, from a previous 1% to 1.50%. The steeper-than-expected inflation in the US has fueled fears of a more aggressive approach to interest rate hikes by the Fed. Investors will therefore pay close attention to what policymakers say during the press conference.
The weekly forecast for GBP/USD is bearish owing to the US inflation rise that could push the Federal Reserve to tighten its policy and push the dollar higher.
Warning:
Trading on CFDs involves a high level of risk, including full loss of your trading funds. Before proceeding to trade, you must understand all risks involved and acknowledge your trading limits, bearing in mind the level of awareness in the financial markets, trading experience, economic capabilities and other aspects.
Disclaimer:
Market Trends, Charts, Trading Ideas or other information provided by BKFX (Pty) Ltd and/or third parties are not intended as an investment advice and/or recommendation. The information provided is not presented as suitable or based on your specific need. You are responsible for your own investment decisions and you should not trade with money you cannot afford to lose. Any views or opinions presented in this Article are solely those of the author and do not necessarily represent those of the Company, unless otherwise specifically stated. The Company may provide the general commentary which is not intended as an investment advice and must not be construed as such. Seek advice from a separate financial advisor if an investment advice is needed. The Company assumes no liability for errors, inaccuracies or omissions, inaccuracies or incompleteness of information, texts, graphics, links or other items contained within this article/material.