GBP/USD looks neutral ahead of BoE Governor’s testimony today and FOMC data tomorrow after having a “low-key” start to the week.
Key Points
- GBP/USD has had a steady week so far in anticipation of Gov. Bailey’s testimony today and FOMC tomorrow.
- On the daily chart, the pair looks neutral.
- The key price levels to look out for are $1.26140 and the Asian low of $1.25792.
GBP/USD Daily Price Analysis: 20/02/2024
The cable had another quiet day on Monday due to the extended US weekend as a result of Presidents’ Day. Yesterday, the pair lost 0.03% of its value, and today, at the time of writing, the pair has risen by 0.07%, climbing to $1.26058.
Overall, the GBP/USD still looks to be trading in the slightly negative zone as we await Minutes from the January FOMC meeting on Wednesday. As things stand, everything still points at the Fed waiting to see if inflationary pressures drop so that rate cuts can come in. This may cause the Fed to delay the rate cuts until July 2024. The CME FedWatch Tool supports this sentiment by predicting a 53% possibility of a rate cut by 25 basis points in the June meeting.
As for the GBP, the BoE is expected to hold its current interest rates as the UK battles a technical recession. BoE Governor Bailey testifies today.
Technically, the outlook for the GBP/USD is neutral in the short-term, as the 50-EMA looks to have flattened following the pair’s consolidation that has lasted for a few months. Also, the RSI, though steadily falling, remains close to the 50-mark.
GBP/USD Intraday Price Analysis – 20/02/2024
Looking at the pair’s price action, the GBP/USD still seems to have not picked a side, bullish or bearish. The high of $1.26922 and the low of $1.25354 from the previous week have remained untouched. When you capture the bearish move from that high to the low with the Fibonacci retracement tool, you’ll observe that the price retraced to $1.26297, which is close to the 0.382 Fibonacci level.
The price has since fallen to a low of $1.25792, which is the most recent Asian low. A lower key price level is at $1.25692, where the price might also go past if it takes out that Asian low.
On the other hand, the 0.5 Fib level stands at $1.26140 on the bullish side. Further above it are $1.26325 and $1.26554.
Key Economic Data for GBP/USD – 20/02/2024
BoE Governor Bailey testifies at 11:15 AM UTC+1. Deputy Governor Ben Broadbent and Monetary Policy Committee (MPC) members Swati Dhingra and Megan Greene will be alongside him.
Goldman Sachs predicts the Bank of England (BoE) will cut interest rates in June, not May, aligning with market expectations of a 60% chance for a 25 basis point decrease. This could weaken the Pound Sterling if BoE Governor Bailey sounds optimistic about inflation and hints at an early policy shift. However, GBP/USD could rise if Bailey or others reject early rate cut expectations.
GBP/USD Key Fibonacci Price Levels 20/02/2024
Based on the 1hr chart, the key Fibonacci price levels for EUR/USD are these:
| Support | Resistance |
| $1.2955 | $1.25955 |
| $1.25692 | $1.26140 |
| $1.25356 | $1.26325 |
| $1.26554 |
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