The antipodean central banks are seemed to do pretty well with the weak currency. Aren’t they?
GBP/USD: daily outlook
The British pound is hovering around key resistance line at 1.2495 being almost intact after the UK labor market report. The data was a mixed bag with jobless claims rising to the record 25.5K unseen from 2011, steady unemployment rate and upbeat wages.
Yesterday, GBP/USD rose to its monthly high on the better-than-expected inflation figures that came out of the UK. Many analysts believe that consumer prices will continue rising thanks to weak pound and surging oil prices. However, the heightened inflation rate will unlikely push the Bank of England to tighten its monetary policy. BoE’s officials said at their last meeting that they won’t be in rush to raise interest rates in the near-term future. It seems that they are prepared to tolerate inflation above the 2% target. So, we don’t expect them undertaking any measures until inflation hits at least 3%.
There are plenty of news on the Brexit front. EU members mainly backed the wording contained in draft negotiating guidelines written by European Union President Donald Tusk after Theresa May formally notified the European officials about the UK’s intentions to leave the union. The formal approval of the guidelines will be delivered at the summit in Brussels on April 29. But even after the release of the EU negotiating stance, the talks on the EU-UK future trade relationships will probably start after elections in France and then Germany. This would offer the British pound a short respite to regain its value in the near-term future.
The technical outlook for GBP/USD after the pair broke the range of strong resistances at 1.2463 (the diagonal trendline and 100-H4 MA), 1.2495 (the upper border of Ichimoku cloud on H4 timeframe) is bullish. There is a room for a further upsurge to 1.2555 (April 3 high). On the downside, the immediate supports can be found at 1.2433, 1.2375 (200-H4 MA).
The last "Pennant" pattern has been broken, so bulls found resistance at 1.2915. Nevertheless, the market is likely going to move on, so we should...
USD/CHF remains weak across the board and stays strong with a bearish consolidation below the 200 SMA at H1 chart…
There's no any reversal pattern so far, so the market is likely going to test the nearest resistance area in the short term...