GBP/USD Susceptible to Slowing UK CPI Ahead of BoE Meeting
The British Pound may face headwinds ahead of the Bank of England (BoE) meeting as the UK CPI is anticipated to show slowing inflation.
Share this:
British Pound Outlook: GBP/USD
GBP/USD may stage further attempts to test the February 2022 high (1.3644) as trades near the monthly high (1.3633), but the British Pound may face headwinds ahead of the Bank of England (BoE) meeting on June 19 as the UK Consumer Price Index (CPI) is anticipated to show slowing inflation.
GBP/USD Susceptible to Slowing UK CPI Ahead of BoE Meeting
Keep in mind, GBP/USD broke out of the opening range for June after defending the advance from the monthly low (1.3454), and the exchange rate may continue to track the positive slope in the 50-Day SMA (1.3355) as it holds above the moving average.
UK Economic Calendar
However, the UK CPI may sway GBP/USD as both the headline and core rate are expected to narrow in May, and signs of slower price growth may generate a bearish reaction in the British Pound as it puts pressure on the Bank of England (BoE) to further unwind its restrictive policy.
Join David Song for the Weekly Fundamental Market Outlook webinar.
David provides a market overview and takes questions in real-time. Register Here
In turn, GBP/USD may struggle to retain the advance from the start of the month amid speculation for lower UK interest rates, but a higher-than-expected CPI print may push the BoE to the sidelines following the 5-4 split to implement a 25bp rate-cut in May.
With that said, the range bound price action in GBP/USD may turn out to be temporary should it continue to hold above 50-Day SMA (1.3355), but the exchange rate may threaten the positive slope in the moving average if it fails to defend the advance from the monthly low (1.3454).
GBP/USD Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; GBP/USD on TradingView
- GBP/USD may stage further attempts to test the February 2022 high (1.3644) as it holds above the 1.3410 (78.6% Fibonacci retracement) to 1.3460 (23.6% Fibonacci extension) zone, with a break/close above 1.3650 (38.2% Fibonacci extension) opening up the 2022 high (1.3749).
- Next area of interest comes in around 1.3800 (161.8% Fibonacci extension) to 1.3810 (50% Fibonacci extension), but lack of momentum to clear the February 2022 high (1.3644) may push GBP/USD back towards the monthly low (1.3454).
- A break/close below the 1.3410 (78.6% Fibonacci retracement) to 1.3460 (23.6% Fibonacci extension) zone brings 1.3310 (100% Fibonacci extension) on the radar, with the next area of interest coming in around 1.3210 (50% Fibonacci extension).
Additional Market Outlooks
EUR/USD Outlook Hinges on Federal Reserve Forward Guidance
Canadian Dollar Forecast: USD/CAD Slump Pushes RSI into Oversold Zone
USD/JPY Weakness Persists with US PPI Unfazed by Higher Tariffs
US Dollar Forecast: USD/CHF Falls Toward Monthly Low amid Soft US CPI
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
Related tags:
Latest market news
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
GBP/USD forecast: US Mid-terms, NFP and BoE put cable in sharp focus
The US dollar has been a standout loser in the FX space today. A Democrat-controlled Congress is widely seen as being at least mildly negative for the dollar, partly because of the potential implications for the AI investment story and partly because of the risk of another prolonged government funding standoff, potentially from next summer. This has allowed the likes of the GBP/USD to rally alongside gold and silver.
GBP/USD Analysis: Sterling Gains Momentum After Employment Surprise
Over recent trading sessions, the British pound has begun to show a notable recovery. This can be observed in the performance of GBP/USD, which has gained more than 1.3% over the last four sessions, reflecting a consistent improvement in sterling's strength against the U.S. dollar.
GBP/AUD falling wedge points to bullish breakout risk ahead of RBA minutes
GBP/AUD is forming a potential bullish continuation pattern, with RBA minutes, Australian unemployment and Bank of England commentary among the catalysts that could spark a breakout.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.