British Pound (GBP) Price Outlook
- Bank Holiday shortened week may see sterling volatility rise.
- BoE and local elections will drive the domestic agenda.
GBP/USD[1] has remained in a fairly narrow trading range over the last two weeks and this may well change next week as various monetary and political risks collide. A Bank Holiday shortened week ahead contains the latest Bank of England (BoE) monetary policy decision and economic updates on Thursday, which may well see the central bank begin to tighten policy by reducing the rate at which it purchases UK bonds over the rest of the year. Thursday also sees the UK local elections and special attention needs to be paid to the Scottish elections where an SNP majority may see IndyRef2 back on the agenda. At the end of the week, the latest US jobs data is likely to confirm the ongoing strength of the US economy, likely giving the greenback a bid.
DailyFX analyst Justin McQueen will be taking an in-depth look at next week’s potential Sterling cross-winds in his weekly GBP[2] Fundamental Forecast posted later today.
For all market-moving economic data and events see the real-time DailyFX calendar.[3]
The daily chart GBP/USD[4] chart shows cable currently trading in a 1.3850-1.4010 range with positive sentiment still intact off a rising trendline. This range needs to broken convincingly – a close and open above or below either resistance or support – to change the recent trend before next week’s data and events come into play. End-of-month fund re-positioning flows are currently seen as marginally positive for GBP/USD at today’s 15:00 GMT fix, while US PCE (12:30 GMT) and Michigan Consumer Sentiment (14:00 GMT) are also released today and should be closely followed.
