The GBPUSD pair fell around 1.3920 on Friday, down for the day but up for the week. The pair bottomed at 1.3863 during the London trading hours, as UK data was mostly disappointing.
The country published January Industrial Production, which contracted by 4.9% YoY. Manufacturing Production in the same period came in at -5.2%. The Trade Balance resulted at £-1.756 billion, while the monthly Gross Domestic Product printed at -2.9%, worse than the previous 1.2% although better than the 4.9% expected.
The numbers indicate that the lockdown restrictions suffered since last December. This Monday, the country will release the March Rightmove House Price Index.
This week, the Fed and Bank of England’s latest rate decision look to be the main catalyst of movement in the British Pound to US Dollar exchange rate. First will be the Fed’s rate decision on Wednesday, in which the US central bank is widely projected to leave its monetary policy unmoved.
The BoE will then conclude its policy its March policy meeting on Thursday. Like the Fed it is also expected to leave interest rates on hold this month, leaving the focus on the bank’s forward guidance.
British pound investors will be impatient to hear policymakers’ opinions on the government’s reopening plans, with the Pound possibly strengthening if they conclude it will allow for a strong rebound in economic growth this year.
In the US, the latest retail sales data will also be in focus, with the US Dollar likely to face some headwinds in the first half of the week if sales growth contracted in line with expectations last month.
Technically, the Cable pair has an increased bearish potential in the daily chart. It has spent the last two days struggling around its 20 SMA, finally settling below it. Technical indicators head south, the Momentum within negative levels, while the RSI also turned lower but holds above its midline.
We remain short due to the US Dollar strength continuation.
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.