The GBPUSD is trading into the 1.3100 technical level, twisting to the bearish side in early Thursday trading but remaining well within the week’s tightening range as Pound traders buckle down for the Bank of England (BoE) rate call due today. What is more? Gain insight into this This extensive 2 August GBPUSD Fundamental Analysis.
BOE Rate Hike Expectations
A 25 bps rate hike from the BoE has been highly anticipated, but a recent slump in UK economic data has left the odds of a rate hike on the low side, and yesterday’s Markit PMI dropped to 54.0, below the market’s broader expectations and slipping further away from the previous reading, implying a slowdown for the UK could be on the cards for England’s domestic economy.
Brexit concerns also remain close to the surface, with trade talks between the EU and the UK continuing to make little progress, despite the official deadline of March 2019 fast approaching and no final deal in sight.
Talks are set to resume in mid-August with Prime Minister Theresa May at the helm, taking over Brexit negotiations personally.
2 August GBPUSD Fundamental Analysis
All eyes are on the BoE for Thursday as broader markets await the will-they-or-won’t-they answer to the UK’s anticipated rate hike, but as FXStreet’s own Valeria Bednarik noted, even a rate hike does materialize and drive the GBP higher on the day, downside remains wide open for Brexit tensions to keep the bearish pressure up:
“Pound gains could be short-lived, ahead of a clearer picture on Brexit. From a technical point of view, the pair retains its neutral stance in the short term, as in the 4 hours chart, it remains stuck to a directionless 20 SMA, while technical indicators continue pivoting directionless around their midlines.”
Support levels: 1.3090 1.3045 1.3010
Resistance levels: 1.3150 1.3190 1.3230
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