Market Overview

GBP/USD Forecast: Exhaustion Is Driving Cable Lower As The Geopolitical Risk Rises

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  • Geopolitical risk is becoming imminent with UK Prime Minister Theresa May calling Cabinet meeting.
  • The Bank of England top officials are unlikely to speak about domestic monetary policy issues while speaking abroad.

The GBP/USD is trading down 0.15 percent at around 1.4160 against the US Dollar as recent upmove is apparently losing steam without being supported by fundamental factors and the risk of geopolitical tensions in Syria increased massively with the US President Trump likely to strike Syria after the weekend gas attacks of the Russia-backed Syrian President Assad on rebels and civil population.

The UK Prime minister Theresa May actually called the Cabinet meeting to discuss the security issues.

At the same time, there are two speeches from the Bank of England top officials scheduled for Thursday. While giving a public speech in his homeland Canada, the Bank of England Governor Mark Carney is set to follow the pattern of his Deputy Governor Ben Broadbent that spoke in Australia more in general terms about the need of combining macroprudential measures with monetary policy under one roof, refraining from making direct monetary policy hints.

Technically, GBP/USD has been correcting from this week’s highs of 1.4220 with technical oscillators turning lower. While Momentum and the Relative Strength Index point downward and Slow Stochastics made a bearish crossover in neutral territory on 1-hour chart, the Bearish cross of 21-period moving average braking 50-period moving average from the upside down would be a much stronger Bearish signal for the pair. Near-term targets for GBP/USD are at 1.4100 and then 1.4050 and strong psychological level of 1.4000 next.

GBP/USD 1-hour chart

gbp_usd_1-hour_chart-636591222864835946.png

Posted-In: FXStreetNews Forex Markets

 

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