GBP USD

The US dollar rally has stalled, and the longer is fails to extends its gains the greater the odds of a pullback. For today, flash PMIs have placed GBP/USD and EUR/USD into focus.

GBP/USD remains in “sell rallies” mode, so bullish readers will want to be nimble against a broader backdrop that favors more downside from here.

Divergent economic and monetary policy outlooks for the US and UK continue to weigh on GBP/USD, making the case for downside a far easier sell than for upside right now.

GBP/USD attempts to recover after CPI cooled less than expected. DAX inches higher ahead of Eurozone inflation data & after ASML earnings.

GBP/USD held at a five-month low after jobs data and ahead of Fed Chair Powell's speech. Oil rose after China's GDP growth and amid ongoing Middle Eastern tensions.

The GBP/USD could be impacted significantly by UK CPI data this week. For now, markets are calm as Iran tensions have eased, but the situation remains volatile, likely to keep risk appetite low. The GBP/USD outlook is bearish as US dollar is likely to remain supported on any short-term dips.

Risk assets tumbled on Middle East tensions, adding additional pressure on the cable on Friday with US dollar already on the rise. Key UK inflation data is coming up in the week ahead, as GBP/USD technical analysis point lower after breaking 1.25 key support.

The biggest economic data release of this week, and arguably the whole month – US CPI – didn’t disappoint in terms of its market impact.

Looking at seasonality patterns shows that the US dollar tends to fall against most FX majors in April, and GBP/USD has been the outperformer.

GBP/USD fell last week after a dovish shift at the BOE prompted traders to increase bets on a June rate cut - see the levels to watch in the coming week!

The trend among G10 FX central banks this week has been to deliver dovish surprises relative to market expectations. That makes for an interesting backdrop for GBP/USD traders as the pair contemplates life above 1.2800 again ahead of the Bank of England meeting on Thursday.

GBP/USD falls after UK inflation cools and ahead of the Fed. EUR/USD falls ahead of the FOMC rate decision and ECB Lagarde’s speech.

FOMC meeting risks are skewed toward a less dovish outcome, with the potential for the median Fed dot for 2024 to rise to 4.9%, or only two interest rate cuts for 2024.

With a BOE and FOMC meeting pending and net-long exposure for GBP/USD at or near a sentiment extreme, I cannot help but wonder if the pound it due at least a pullback. I also take a closer look at the US dollar index (DXY), gold and the Nasdaq 100.

All eyes are on the FOMC and dot plots, with pound trades facing additional test with BoE rate decision, CPI, and retail sales all to come in the week ahead. GBP/USD technical analysis shows bullish trend is losing momentum.

Welcome to another edition of Forex Friday, a weekly report in which we highlight selected currency themes. In this week’s report, we will discuss the US dollar, Japanese yen, gold and the pound ahead of a busy next week for central banks.

GBP/USD has formed a bearish reversal pattern beneath a failed breakout level, and gold looks set to retrace lower ahead of US PPI data.