GBP/USD Price, Chart, and Analysis
- Fuel shortages across the country need to be rectified immediately.
- BoE and Fed speakers will help steer GBP/USD this week.
The UK government is to suspend competition laws between oil firms to help get fuel to the parts of the country suffering most from the petrol shortage. Over the weekend long lines of traffic blocked UK roads as drivers queued to buy petrol before forecourts ran out of fuel, sparking fears that the supply chains may suffer further, dampening UK growth prospects. The government also announced that it would issue around 5,000 temporary visas for foreign lorry drivers to help ease the problem although this looks like a case of ‘after the horse has bolted’ as companies suffer across the country.
The latest ONS covid-19 data continue to show the number of new cases and fatalities rising on a weekly basis despite the high numbers of one and two case vaccinations. Nearly 90% of the population over the age of 16 have had one vaccination dose, while just over 82% have had two shots.
This week’s economic calendar is full of US Fed speakers and commentary from UK BoE governor Andrew Bailey, leaving GBP/USD at risk. Cable has struggled to break higher of late despite money markets indicating that the BoE will hike rates by 15bps in February 2022 and by another 25 bps over the course of the year. It now looks likely that the UK central bank will hike rates at least once, and most probably twice, before the Fed moves as UK inflation remains above target.
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GBP/USD looks as if it has found a supportive base around the 1.3600 level with recent prior highs and the 20- and 50-day simple moving averages around 1.3780 the next level of resistance. Cable may find itself trading sideways between these two levels this week unless disrupted by any central bank speak.
GBP/USD DAILY PRICE CHART SEPTEMBER 27, 2021
Retail trader data show71.67% of traders are net-long with the ratio of traders long to short at 2.53 to 1. The number of traders net-long is 3.13% higher than yesterday and 22.70% higher from last week, while the number of traders net-short is 0.13% higher than yesterday and 18.29% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall.Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger GBP/USD-bearish contrarian trading bias.
What is your view on GBP/USD– bullish or bearish??
By Nick Cawley, Strategist, 27 September 2021. DailyFX