POUND STERLING TALKING POINTS
- Can UK GDP beat estimates?
- GBP/USD in limbo pending basic catalyst.
GBP/USD FUNDAMENTAL BACKDROP
After yesterday’s greenback selloff submit U.S. inflation (decreased price hike expectations from the Fed), GBP/USD has not moved a lot from it’s earlier shut. Wanting on the fundamentals going through the UK economic system in addition to the message relayed from the Financial institution of England (BoE), recessionary fears stay on the forefront of everybody’s minds. This heightens the affect of tomorrow’s UK GDP print (see calendar under) and something lower than anticipated might possible lead to pound depreciation, thus amplifying recession fears within the area.
Later within the day, U.S. shopper sentiment is predicted increased than the July situation and if precise information reads according to forecasts, the buck might discover some bids late within the European session.
GBP/USD ECONOMIC CALENDAR
Supply: DailyFX Financial Calendar
GBP/USD DAILY CHART
Chart ready by Warren Venketas, IG
GBP/USD worth motion reveals bulls unable to breach the August swing excessive at 1.2293 with todays doji candlestick indicative of short-term indecision as traders await UK GDP. My view on cable stays constrained between 1.2080 and the psychological 1.2400 ranges over the subsequent month or two with my short-term bias skewed in favor of greenback energy ceteris paribus.
Key resistance ranges:
- 100-day EMA (yellow)
Key assist ranges:
- 50-day EMA (blue)
- 20-day EMA (purple)
BULLISH IG CLIENT SENTIMENT
IG Consumer Sentiment Information (IGCS) reveals retail merchants are at the moment LONG on GBP/USD, with 64% of merchants at the moment holding lengthy positions (as of this writing). At DailyFX we usually take a contrarian view to crowd sentiment nonetheless because of current modifications in lengthy and brief positions we decide on a short-term upside bias.
Contact and comply with Warren on Twitter: @WVenketas