GBP/USDFUNDAMENTAL HIGHLIGHTS:GBP REJECTS RESISTANCEBOE DOWNPLAYS NEGATIVE RATESMARKET SENTIMENT TO DICTATE GBPGBP REJECTS RESIST
GBP/USDFUNDAMENTAL HIGHLIGHTS:
- GBP REJECTS RESISTANCE
- BOE DOWNPLAYS NEGATIVE RATES
- MARKET SENTIMENT TO DICTATE GBP
GBP REJECTS RESISTANCE: In what has been comparatively uneven week for FX markets, GBP/USD eked out minor positive factors of 0.2% (on the time of writing), whereas EUR/GBP headed in the direction of key multi-month assist at 0.8860-70. Again to GBP/USD and for these technical ranges, the 20DMA resides at 1.3568, during which an in depth under might mark a double high at 1.37.
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GBP/USD Chart: Every day Time Body
Supply: Refinitiv
BOE DOWNPLAYS NEGATIVE RATES: In mild of the third nationwide lockdown, unfavourable charges had as soon as once more comeback into the highlight. BoE’s Tenreyro continued to stay in favour of NIRP, noting that theoretically, charges might go to -0.75%. Nonetheless, with BoE Governor Bailey stating that unfavourable charges are a controversial difficulty, a slight hawkish repricing in OIS markets had stored GBP higher bid on the crosses.
BANK OF ENGLAND COMMENTARY
The Financial institution of England: A Foreign exchange Dealer’s Information
MARKET SENTIMENT TO DICTATE GBP: Looking forward to subsequent week, whereas the UK’s vaccine rollout has been helped underpin GBP regardless of the elevated variety of virus circumstances, market sentiment will probably stay the important thing driver within the quick time period for the forex. That stated, home knowledge will likely be value watching and significantly the UK PMIs, which supplies a extra well timed replace relating to the UK economic system. Though, with the providers sector more likely to stay in contractionary territory given the present nationwide lockdown, eyes will likely be on the manufacturing sector, which would be the first have a look at enterprise sentiment post-Brexit.
UPCOMING GBP RISK EVENTS
Jan 20th: UK CPI
Jan22nd: UK PMI & Retail Gross sales
EUR/GBP LEVELS IN FOCUS
| Change in | Longs | Shorts | OI |
| Every day | 10% | 1% | 7% |
| Weekly | 147% | -29% | 41% |
Supply: Refinitiv
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