GBP/USD consolidates below 1.2950

GBP/USD held above daily lows during the American session despite US dollar strength. The recovery of the pair from 1.2901 was capped around 1.2950. Near the end of the day, cable was hovering around 1.2920/30, marginally lower for the day. 

The intra-day tone favors the US dollar, but on a wider perspective, the bullish bias of the pair remains intact. Tomorrow the Monetary Policy Committee of the Bank of England will meet. Their decision and the minutes of the meeting will be released on Thursday, with the Inflation Report. In the US, traders will continue to listen to speeches from FOMC members, ahead of inflation data (PPI on Thursday and CPI on Friday). 

Short-term outlook 

According to Valeria Bednarik, Chief Analyst at FXStreet, investors are waiting for the upcoming BoE meeting, before making decisions on the pair. “The Central Bank is expected to revise its inflation and growth forecasts,  but also to maintain rates unchanged. Attention will therefore focus on how policy makers vote, as on the previous meeting 1 member voted for a hike”. 

From a technical perspective, Bednarik explained that the picture is neutral-to-bearish, as despite bouncing from the mentioned low, the pair was unable to regain ground above its 20 SMA. “Whilst technical indicators have turned lower, but remain within neutral territory. Furthermore, the pair posted a lower low and a lower high daily basis, another sign of fading buying interest”.

GBP/USD analysis: waiting for the BOE for fresh clues

GBP keeps rising vs CHF, EUR

The pound continues to rise against its main European rivals. The Swiss franc remains weak in the market and pushed GBP/CHF above 1.3000, for the first time since October. The pair is rising for the fourth day in a row, up 2.40% since Friday. While EUR/GBP is testing the 0.8400 area and reached today the lowest since April 21.