Gbpusd Await Bailey Testimony

last updated on

Gbpusd Await Bailey Testimony

Gbp/Usd Trades Below 1.2600 As Markets Await Bailey Testimony

We are going through Tuesday's European session, and GBP/USD is weak under the 1.2600 handle. Conversely, the USD is showing ample demand in the market as the market players are flocking toward safe-haven assets.

The key catalyst for the GBP/USD is the upcoming testimony of Bailey (BoE Governor). That the governor's testimony keeps everyone on their toes is right. As per the details, Bailey will shed light on the Monetary Policy, including interest rates.

Gbp/Usd - Rsi Remains Under 50

The GBP/USD technical chart (4-hr) shows that the RSI line is still under 50. Additionally, the GBP/USD pair has closed two candles under the 20 and 50 SMA lines, which means there's no short-term buying interest.

The top side appears capped at 1.2600, which is the nearest resistance. Furthermore, the 50 SMA is also present at this spot, which makes it a formidable obstacle for the GBP bulls. According to technical analysis, the following resistance levels can be found at 1.2630, 1.2650, and 1.2670.

The downside shows that the 38.2% fib retracement level near 1.2540 is the most probable support, followed by 1.2520 and then the 1.2500 static level.

For now, one thing is clear: GBP/USD isn't showing any buying interest, similar to what we saw during Monday's session. The GBP/USD will close in red today if the trend continues.

Keeping the technicals aside for a moment, the testimony of the BoE governor will play a key role. Any hints that the BoE is thinking about an early exit from the era of high interest rates will send the GBP lower.

According to one expert, there is a growing risk that BoE's tight monetary policy will negatively impact the economy. At the same time, the members of the BoE also need to calculate the future value of inflation to figure out any easing/tightening measures.

Trending Stories