Gbpusd Remains Little Changed

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Gbpusd Remains Little Changed

Gbp/Usd Remains Little Changed

Chief FX strategist from Scotiabank has recently shared their views on the GBP/USD. According to them, the BoE's Bailey comments show that the central bank's policy remains cautious in the near term.

BoE Bailey made it clear that they can't claim victory over inflation right now. He added that it would be too early to celebrate as inflation has yet to move lower toward the target range.

Boe To Cut Rates Again In November

This confirms the view that the BoE policymakers will likely wait for more economic data releases. That's why it is safe to say that the next rate cut from the Bank of England will likely come in November 2024.

Meanwhile, the GBP/USD continues to trade with little movement. However, the UK bank holiday is also a major reason for the thin trading volumes in the GBP/USD.

If we look at the price action of GBP/USD, it is trading a little lower from the high of 1.3230 made on Friday. It seems that GBP/USD is going through consolidation while the nearest support is around 1.3178.

If the GBP/USD penetrates the 1.3178 support, it will lead to more selling and a deeper correction wave. However, the market dynamics show that there is very limited scope for any weakness in the GBP/USD.

In fact, there's a good chance that the GBP/USD will likely turn higher and reach a bullish target of 1.3330. On the way down, the support near the 1.3125 - 1.3130 remains strong and will likely stop the bears from targeting lower.

The fundamental situation has also become interesting as the Fed is likely to cut rates in September. Meanwhile, the nearest rate cut from the Bank of England is in November. This makes the GBP a more lucrative option than the USD.

We also need to account for the political uncertainty in the USA due to elections. But once the elections are done in November, it would lift a lot of weight from the US Dollar.

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