He went to a maximum of four months, taking advantage of the psychological mango of 1.3000 yesterday. A new test and incursion previously found a modest sales pressure that keeps the cable just below the key level for now.
The cable as has been a significant beneficiary of the weakness of the US dollar in recent weeks. A combination of softest data that has raised recession concerns and a general change by US dollar market participants to other safe shelter assets have abolished the attractiveness of green cover.
That trend continued yesterday with US data. Continuing chasing the dollar. The Greenback fell against all G10 coins, excluding Yen yesterday. February retail sales increased less than expected (0.2% month by month versus 0.6% consensus) after a large drop in January, while the EMPIRE manufacturing index collapsed to the lowest level in more than a year.
Uncertainty of the Central Bank to lead to a consolidation period?
The central banks are focused this week both with the meeting of the Federal Reserve and the Bank of England (BOE). This could lead to a pause in the cable rally as the markets adopt a waiting and see approach.
It is likely that the Bank of England (BOE) maintains the interesting rates of the United Kingdom without changes after reducing them by 25 basic points in February. The Central Bank can adopt a cautious approach due to the uncertainty about the commercial policy of the United States that affects the global economy.
This could reduce the expectations of another quick rate cut, which GBP/USD supports. However, Governor Andrew Bailey and his team could still take a cautious tone, which suggests that they will relieve slowly and carefully monetary policy.
The softest data in the US have seen an increase in the expectations for reducing the late rate, which could work in favor of higher profits for the cable. That is whether the Federal Reserve suggests more rates cuts this year.
However, given the narration around inflation and with universal tariffs scheduled for April, I think the Fed could maintain its current political position at this week’s meeting.
Technical analysis: GBP/USD
GBP/USD has been in a tear from the trend line and the February 11 test.
Since then, the cable has increased about 660 ODD pip to trade around the psychological 1.3000.
The trend is strong at this stage, but a daily candle is needed above the 1.3000 handle so that the bulls remain in control.
If that happens, the immediate resistance will be found in 1,3140 and 1,3210.
A 1.3000 handle rejection can find support in 1,2864 and then the 200 -day MA in 1,2797 focuses.
GBP/USD Diario Graph, March 18, 2025
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