Jump to content

British Pound (GBP) Forecast – GBP/USD Pushing Higher Ahead of Heavyweight Data Releases


Recommended Posts

GBP/USD Price, Chart, and Analysis

  • UK 10yr bond yields trim recent highs but remain firm.
  • US CPI and UK GDP will steer GBP/USD in the short term.
GBP/USD Weekly Price Forecast - British Pound Gives Up Massive Gains

Cable (GBP/USD) is nudging higher in early trade, helped by a marginally weaker US dollar and an accommodative UK gilt complex, ahead of two important data releases later in the week. The 10yr UK benchmark gilt is trading with a yield of 1.435%, down from a multi-year high of 1.50% made on Tuesday but still nearly 50 basis points higher on the year. The gilt market has been pricing in a series of further UK rate hikes over the last few weeks and this is underpinning the British Pound against a range of other currencies.

British Pound (GBP) Forecast – GBP/USD Pushing Higher Ahead of Heavyweight Data Releases

The Bank of England’s 25 basis point rate hike last week to 0.50% is expected to be followed by a further 25bp hike at the next MPC meeting in March with further hikes priced in throughout the year as the central bank grapples with a multi-decade high inflation rate (5.4%). At the last MPC meeting, the BoE said that inflation may hit in excess of 7% in the short term. Rates markets are now pricing in a Bank Rate of 1.5% by the end of 2022.

In the short term, cable will be moved by the latest look at US inflation on Thursday (13:30 GMT) and the December UK GDP numbers that will be released on Friday (07:00 GMT). Both releases need to be closely followed by GBP/USD traders.

Keep up to date with all market-moving data releases and events by using the DailyFX Calendar

The outlook for GBP/USD remains mixed on the daily chart with a series of lower highs still in place, while the recent series of lower lows was broken at the end of January. The pair are trapped in the middle of all three simple moving averages adding to the mixed outlook. Initial resistance comes is seen around 1.3630 while support is seen at 1.3515.

 

GBP/USD DAILY PRICE CHART – FEBRUARY 9, 2022

British Pound (GBP) Forecast – GBP/USD Pushing Higher Ahead of Heavyweight Data Releases

Retail trader data show 54.26% of traders are net-long with the ratio of traders long to short at 1.19 to 1. The number of traders net-long is 6.66% higher than yesterday and 7.89% higher from last week, while the number of traders net-short is 1.02% lower than yesterday and 2.10% 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.

image.png

What is your view on GBP/USD – bullish or bearish?

 

 

Feb 9, 2022 |   Nick Cawley, Strategist. DailyFX

  • Great! 1
Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      19,989
    • Total Posts
      87,951
    • Total Members
      69,142
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    Bobminor
    Joined 25/09/22 20:58
  • Posts

    • Hey @pravid17 I hope you're well.  In the leveraged trading industry there are brokers who don't hedge client's exposure and brokers (like ourselves) who do hedge client's exposure.  In a perfect world the exposure of short clients would net off the trades of long clients however this is not always the case. Our hedging model allows us to take an exposure in the underlying market for the remaining exposure which doesn't offset - This way we don't need to hedge every trade, worry about profits of our clients and results in lower costs for hedging in the underlying market (commissions, interest etc.). So say 60% of IG customer exposure in the ASX was long and 40% of exposure on the ASX was short. The 40% would net each other off but there's a remaining 20% of customers who need to be hedged to cover their positions. We go into the market and hedge this.  We make our money primarily through our spreads and overnight funding  with other fees making up a small proportion of our revenue. I would like to remind also that IG is regulated by several bodies globally, including top-tier regulators like the UK's FCA, Germany's BaFIN, Australia's ASIC - This should be quite reassuring from a dealing execution and transparency perspective.  I hope this helps, let me know if you have any other question 
    • A survey from Reviews.org, which featured 1000 Americans, found that as many as 1 in 4 US subscribers may quit the service in the next year.    Jeremy Naylor | Writer, London | Publication date: Friday 23 September 2022  There was an interesting breakdown, but the main reason was affordability. Only 18% said they would move to a cheaper competitor. IGTV’s Jeremy Naylor looks at the numbers. Netflix subscription woes Netflix Inc (All Sessions) could be in for a rough time ahead over the next 12 months if a new survey is anything to go by, which was conducted in the US. Out of the 1,000 adults that took part in this survey undertaken by Reviews.org, around 25% of those that were covered said that they would be cancelling their Netflix subscription within the next 12 months. Now, it says with that 25% of US subscribers to Netflix considering leaving, not to join a competitor, but mostly because of pressures on household bills. This is how it is split: rising cost of subscriptions - 40% inflation - 20% a lack of content - 22% spending more time on the services of others - 18% So you can see, a minority said they were going to other services, such as those provided by Disney Plus or Amazon Prime. The cost of Netflix has risen dramatically this year as its basic plan increased by 11% in January and its other plans by 20% to 25%. Now these were the first price increases for three years, so that itself is relatively new for a lot of subscribers. Netflix share price Let's take a look at the Netflix share price. You can see on the far left hand side of this chart the COVID lows at $290.39. We saw a whacking great increase there of 141% to the top and the record high in Netflix shares back in November 2021. And that was when subscriptions were rising, people were paying more for their services, and it was all humming beautifully. And then all of a sudden people started questioning the numbers of streaming services they were undertaking with some deciding to withdraw from Netflix. All of a sudden the big drops started coming through with profit warnings and sales warnings. We've recently hit a new low of $162.50. Since then there has been a little bit of an increase. We're currently trading at $232.75, but we are down by a margin of 1.75% in today's session, which reflects this news that we could well see a relatively large drop in subscribers for Netflix in the US within the next 12 months.
    • Market data to trade the week of 26 September: Nasdaq; NXT From the economic calendar next week IG technical analyst, Axel Rudolph, picks up on a short trade on the Nasdaq around US inflation data. Meanwhile, despite another light week of corporate data, Axel picks out the chart of Next plc (NXT) as an interesting trade to think about.          
×
×
  • Create New...