The UK hiked interest another 50 basis points this morning. Rates are now at 1.75% and inflation is still projected to be much higher next quarter. Here is our outlook on the pound and where we think it will be going in the future.
As output decreases and inflation sits at highs from the 80s, forecasts are now expecting that the economy will enter a recession this year. Growth has not been very impressive in 2022 as contractions continue to fuel bearish sentiment in the UK..
It also looks like the pound is struggling with these aggressive hikes, similarly to the euro. BoE is still dedicated towards the inflation curb, but the economy may suffer as a result.
Analysts also expect inflation to finally reach its peak in October of this year at 13.3%. This will take years to eventually come down to reach its 2% target.
GU bounces off support on the 1D timeframe again and is coming up to the break even level. The recent break above a falling long term trend line is a bullish sign for the pair for a potential momentum shift. Resistance sits at 1.23110. If price breaks under current support, we could see the pair move lower towards 1.19400s.
GBPJPY falls lower on the 1D after the BoE's rate hike decision. Price got rejected from the highs as it retraced from resistance. The pair might try to move lower to test 159.500 if the downside continues. After the recent break under a supportive trend line, we could see a shift towards a downtrend as pound weakness continues.
GBPAUD has been channeling sideways since April which is a promising setup on these supply and demand zones on the 1D timeframe. After each test on the low, the pair eventually makes its way back up to the 1.77000s. So, this pair looks to be a good channel trend play.
As of 9:10 am EST, the 10-Year bond rate is up ~3.50% while the dollar index remains flat. Some big news coming up in the next 24 hours for the USD, EUR and AUD. US consumer confidence is expected to fall from the last reading. We received a strange signal from the EdgeFinder that could […]
This week, we have seen a lot of market swings in sentiment along with uncertainty around economic stability. Because of this mixed mindset, investors have been shifting their interest towards gold. This article will cover why gold could continue to move higher. Medium to high impact news is coming up for all currencies such as […]
There are some major news ahead for the EUR, CAD, AUD and USD pairs this week. Wednesday will be another Fed rate decision forecasted to be another 25 bp. Here are some events set to come out tomorrow: EdgeFinder Analysis UC is still the EdgeFinder's favorite buy score along with USDZAR at +7. Retail is […]
