The Federal Reserve speeds up its quantitative tightening, and this is certainly bullish news for the USD. At the same time, this is a negative factor for the American stocks, which have entered their seasonally worst month.
GBP/USD: forecast for Dec. 18-22
After declining to 1.33, GBP/USD managed to return above 1.3400.
The highlight of the week was the meeting of the Bank of England. The regulator said that despite above-target inflation and progress in Brexit talks it would raise interest rates only gradually. Some traders expected something more hawkish from the central bank and got disappointed.
British Prime Minister Theresa May was defeated in parliament over Brexit: the lawmakers voted to hand themselves more say over a final exit deal with the EU. This may complicate Brexit. Yet, for now the market is not considering this as a great risk.
On the bright side, retail sales which rose 1.1% in November, 3 times more than expected. In the coming days, the UK will release public sector net borrowing, final GDP and current account. A formal agreement between Britain and the European Union is needed to lift the pound higher. Economic news from the United States will also have an impact on GBP/USD in the coming days.
Technically the pair is struggling to make a decisive move above the resistance line, which has been in place since 2014. A significant obstacle is found in the 0.3500 area. A fix above this level may open the way to 1.3630.
Last week the speech of the Fed's Chair Jerome Powell led to big swings in the market. The USD jumped, while EURUSD and GBPUSD revisited lows. Gold and US500 also got under pressure.
The gold has made a perfect retest, but will it hold against the rising dollar? Also, the Jackson Hole Symposium and Jerome Powell's speech may become critical for most assets, and finally, more economic releases and earnings reports await you.
Although the last week was intense, this one may be more dynamic and volatile. After the FOMC meeting and controversial decisions from the Bank of England, we saw a historical pound decrease, and the gold plunge. And there’s even more for you.
After the US CPI last week came out above the forecast, traders started expecting a 75-basis point rate hike…
In this video, we will talk about the potential change of a trend in the euro, another stock rally amid a global downtrend, gold prospects, and news that shakes the world right now. It’ll be a helpful video you don’t want to miss.