Pound trades sideways
GBP/USD traded sideways overnight and there was consolidation in the $1.5140 region. We are not expecting any economic announcements from the UK or the US today.
On Wednesday the Bank of England will reveal the voting breakdown from its last meeting, and the market is expecting two members to be in favour hiking rates and the other seven members to prefer leaving rates on hold. In relation to the asset purchasing scheme all nine members are anticipated to vote in support of keeping it unchanged at £375 billion. Should expectations be met it will keep pressure on GBP/USD.
As Chris Beauchamp stated, the excellent consumer confidence figures from the US on Friday highlights the widening gap between the two countries and this will ensure GBP/USD remains in its downward trend.
GBP/USD is still below the 200-hour moving average of $1.5152, and should this key resistance level hold price action is likely to retest downside support at $1.51. A move through this will bring the recent low of $1.5035 in sight. However, if the 200-hour MA is cleared, thus turning into support, an upside target of the pair’s 50-hour MA at $1.5171 would be brought into play.