Jump to content

British Pound (GBP) Forecast: GBP/USD Dragged Down by Euro Woes


Recommended Posts

Jul 11, 2022 | DailyFX
Justin McQueen, Strategist

GBP/USD, EUR/GBP ANALYSIS AND TALKING POINTS

  • Tory MPs Enter the Leadership Race
  • GBP Falls Back Below 1.2000

British Pound (GBP) Forecast: GBP/USD Dragged Down by Euro Woes
 

GBP: While politics grabs the headlines as Tory MPs throw their hat into the Tory leadership contest, the Pound will remain dictated by external events. As such, with a renewed bid in the greenback, GBP is once again on the backfoot as cable breaks back below the 1.20 handle, falling in sympathy with the Euro.

Today sees gas flows from Russia to Germany via the Nord Stream pipeline stopping completely for a planned 10-day annual maintenance. However, in light of the current backdrop and with gas flows already falling to 40% capacity, the risk is whether Russia switches back the tap on after the maintenance period. In turn, headline risk regarding Russian gas flows will pick up during this period.

If Russia were not to switch on the Nord Stream pipeline, markets will significantly reprice a recession in the Euro Area, pushing the Euro firmly through parity, dragging the Pound with it, opening the doors to 1.17 and perhaps even an extended move to 1.15.

Looking ahead, today is a relatively quiet start to the week in terms of scheduled economic data releases. However, BoE Governor Bailey will be speaking on the Financial Stability Report later today.

On the technical side, downside momentum will likely remain for cable with any rallies likely to be faded. Meanwhile, declines in EUR/GBP have been halted at the 100 and 200DMA, although, with the Euro extremely fragile, upside is limited.

GBP/USD CHART: DAILY TIME FRAME

British Pound (GBP) Forecast: GBP/USD Dragged Down by Euro Woes

Source: Refinitiv

EUR/GBP CHART: DAILY TIME FRAME

British Pound (GBP) Forecast: GBP/USD Dragged Down by Euro Woes

Source: Refinitiv

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
      22,086
    • Total Posts
      92,935
    • Total Members
      42,475
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    IPS Temp Admin
    Joined 06/10/22 15:40
  • Posts

    • Commodity Markets: Forex, Bonds, US Gold, Silver, Iron Ore,Copper Lithium,Nickel, Crude Oil, Natural Gas. Elliott Wave   Commodities Market Summary: The USD DXY USDJPY are heading higher into Wave iii) and iv) corrections so are the FX pairs and so are GDX and US Spot Gold. So, there are no larger trends, just corrections.   Trading Strategies: No strategies as markets are in small corrective patterns.   Video Chapters 00:00 US Gov Bonds 10 Yr Yields 00:44 US Dollar Index DXY USDJPY, EURUSD, AUDUSD 05:50 US Spot Gold / GDX ETF 08:41 US Spot Silver 11:20 US Copper / Lithium / Nickel / Iron Ore 19:01 Crude Oil 21:21 Natural Gas 27:11 End   Analyst Peter Mathers TradingLounge™ Australian Financial Services Licence - AFSL 317817   Source: tradinglounge com Access Trial here... buy 1 month Get 3 months              
    • Hi @AndaIG, Please could the [LOUP] Innovator Deepwater Frontier Tech ETF be listed and made available for the ISA tax wrapper, pretty please? Many thanks, Sam
    • Look ahead to 31/5/23: China PMI; France GDP; Germany CPI Economic data is key on Wednesday. It starts in Japan with retail sales, followed by Chinese PMI.  Jeremy Naylor | Analyst, London | Publication date: Tuesday 30 May 2023  IGTV’s Jeremy Naylor looks at the chances that the Chinese yuan will weaken further as it becomes more and more obvious that the recovery in China is further away than initially expected. Then in the eurozone we’re looking at the CAC 40 and DAX as growth and inflation data is released. The only corporate on the schedule is from stationers, WH Smith.          
×
×
  • Create New...