Bullish Signs in GBP/USD After Positive Comments from BOE’s Bailey
GBP/USD has been bullish since October last year, after the intervention by the Bank of England (BOE) which stabilized the situation. Buyers pushed the price to 1.2450s by December and retested that zone in January as well, but the resistance held and the price retreated lower again. Although the 200 SMA (purple) stopped the retreat and the price bounced off that moving average, finally pushing this pair above the resistance in early April.
This week GBP/USD is holding up well, while the Euro has been slipping lower against the USD. Yesterday the GBP returned to being flat for the day, recovering from initial losses triggered by Bank of England Governor Andrew Bailey’s remarks that he anticipated a decrease in price pressures by April. Furthermore, data revealed that the unemployment rate in the UK rose to 3.9%, while the rate of growth in total wages remained unchanged on Tuesday.
Yesterday we saw a dip below the support after the comments from Bailey, but the price bounced back off the 50 SMA (yellow) so the support is holding. GBP/USD closed the day around 1.2490 but the stochastic indicator is oversold on the daily chart, which shows that the price is about to reverse higher after the retreat last week. So, we are looking to buy GBP/USD.
Remarks by BOE Governor, Andrew Bailey
- We expected a shallow, long recession back in November
- Now we are forecasting modest, but positive growth
- There has been greater resilience in the economy than expected
- But inflation has also come in higher than expected
- However, we have good reasons to expect inflation to fall sharply in the coming months
- That should begin with the April number, to be released on 24 May
- Risks to inflation are skewed significantly to the upside
- Our commitment to 2% inflation is unwavering
- Full speech
These aren’t anything that we don’t already know. However, he is putting a good deal of emphasis on the upcoming CPI data later this month. That will be one to watch and while base effects are something to watch out for, we will see if the BOE can rely on price pressures to fall in the months ahead to head to the sidelines
GBP/USD Live Chart
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Dear , thank you for updating us about “Bullish Signs in GBP/USD After Positive Comments from BOE’s Bailey”.
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