Jump to content

British Pound Forecast – GBPUSD Struggles Continue as US CPI Release Nears

Recommended Posts


  • The latest pullback is finding little traction.
  • US headline CPI rumored with an ‘8%’ handle.
Shorting the Pound Explained | IG EN

Cable is finding life tough at the moment with the pair stuck in a pronounced multi-month downwards trend. This week’s fresh nadir continued a series of lower lows, while the weakness of any rebound over the past few months has kept the sequence of lower highs intact. Cable needs a period of consolidation otherwise fresh lows, and an attempt at 1.3000 looks increasingly likely.

British Pound Forecast (GBPUSD) Sterling Helpless in The Face of US Dollar Dominance

Yesterday’s US dollar sell-off may be reversed later today when we get the latest US inflation report with market talk that the headline figure may be in excess of 8%. White House press secretary Jen Psaki yesterday warned of higher headline inflation with last month’s print of 7.5% expected to be broken with ease. US inflation currently stands at a 40-year high.

British Pound Forecast – GBPUSD Struggles Continue as US CPI Release Nears


The daily GBPUSD chart shows a cluster of prior lows pierced earlier this week before a bout of US dollar weakness yesterday allowed cable to regain 1.3100. Today’s partial fade of that move does not instil much confidence in GBPUSD, especially with the US inflation release on tap. Cable has erased its extremely oversold reading (CCI) but needs a period of consolidation if it is to move higher. Monthly UK GDP data is released tomorrow and a strong reading may well help to underpin cable at current levels ahead of next week’s Bank of England MPC decision.

For all market-moving economic data and events, refer to the DailyFX calendar


British Pound Forecast – GBPUSD Struggles Continue as US CPI Release Nears

Retail trader data show 72.64% of traders are net-long with the ratio of traders long to short at 2.66 to 1. The number of traders net-long is 1.42% lower than yesterday and 26.04% higher from last week, while the number of traders net-short is 1.29% higher than yesterday and 29.25% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall. Positioning is less net-long than yesterday but more net-long from last week. The combination of current sentiment and recent changes gives us a further mixed GBP/USD trading bias.


What is your view on GBP/USD – bullish or bearish?


Mar 10, 2022 | DailyFX
Nick Cawley, Strategist

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Posts

    • Sainsburys full year earnings and Unilever’s first quarter trading update both say the same thing, UK consumers are in for higher prices. The war in Ukraine, supply chain issues and the effects of ongoing Covid all to blame.      
    • US Dollar (DXY) Daily Price and Analysis US Q1 GDP may stall the greenback’s advance. A 20-year high nears for the US dollar. The multi-month US dollar rally continues with the greenback printing a fresh high today ahead of the first look at US Q1 GDP at 12.30 GMT. The US dollar basket (DXY) has been boosted by renewed weakness in the Euro and the Japanese Yen, as investors move from lower-yielding to higher-yielding currencies, while safe-haven flows continue to benefit the greenback. The US growth release later in the session is expected to show a sharp slowdown from the robust Q4 figure of 6.9%. The markets are currently pricing in growth of just 1% for the first three months of this year, with the slowdown mainly due to a reduction in inventory accrual over the quarter. This release is unlikely to move the greenback, unless there is a large miss or beat, as the Fed believe that 2022 US growth will be robust enough to let them tighten monetary policy sharply without damaging the economy. The latest US Core PCE data – the Fed’s preferred inflation reading – is released on Friday and this may have more effect on the US dollar than today’s GDP data. For all market moving economic data and events, see the DailyFX Calendar. The ongoing US dollar rally has been aided by weakness across a range of G7 currencies including the Euro, the Japanese Yen, and the British Pound. The Euro continues to battle with lowly growth expectations, exacerbated by energy concerns, the British Pound is mired by weak economic data, while the Japanese Yen is in freefall as the BoJ continues with its ultra-loose monetary policy.   The US dollar continues to press higher and looks set to break above 103.96, the March 2020 high. Above here the US dollar would be back at levels last seen nearly two decades ago. The March resistance will likely hold in the short-term, especially with month-end portfolio rebalancing at the end of the week, but US dollar strength is set to continue in the months ahead. USDOLLAR (DXY) WEEKLY PRICE CHART – APRIL 28, 2022 {{THE_FUNDAMENTALS_OF_BREAKOUT_TRADING}} What is your view on the US Dollar – bullish or bearish?   Apr 28, 2022 | DailyFX Nick Cawley, Strategist
    • While Tesla has nothing directly to do with Elon Musk buying Twitter - TSLA stock closed down 12% on news that Musk may have to sell stock and use other holdings to stand against the loan to finalise the purchase of the social media giant.        
  • Create New...