GBP Rallying
The British Pound has emerged as one of the strongest performing currencies on Tuesday as traders return following the long Easter weekend. The recent surprise upside in UK inflation has renewed the market’s hawkish BOE expectations, lifting the likelihood of continued tightening from the BOE in coming months. With BOE expectations now sitting among the more hawkish in the G10 camp, GBP looks likely to gain further near-term, especially against currencies where central bank tightening expectations are falling.
USD Weakening
USD has been on the backfoot today as traders look ahead to tomorrow’s US CPI report. The data is expected to confirm a further large drop in US inflation which, if seen, should further widen the divergence in monetary policy expectations between the BOE and the Fed, supporting GBPUSD. The retail market currently holds a large 72% short position in the pair, suggesting plenty of room for a fresh push higher near-term.
Technical Views
GBPUSD
The pair is turning higher again off the bull channel support following the correction lower from highs above 1.25. Price is currently testing the 1.2437 level resistance with a break higher here putting the focus on a bigger move higher towards the 1.2659 level longer-term. Momentum studies are turning bullish, supporting the move.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.