The GBP/USD has seen a quiet Asia session for Tuesday, dipping into Monday’s low near 1.3295 before resuming trading near 1.3320. The Sterling saw little action for the new week with UK institutions off for a long weekend in celebration of the Spring Bank Holiday. The GBP liquidity is expected to return in-force today for the upcoming London market session. Despite expected increase in volatility for the pair during today’s session the pair is unlikely to see huge actions with only the BRC Shop Price Index on schedule in UK’s calendar for the day which is expected to drop late at 23:01 GMT (last reading -1%). Market flow fueled by fickle risk appetite is likely to remain the key driver for the major pair.
GBPUSD Falls Below 1.33
The GBPUSD pair is currently consolidating within a very tight range just above Friday’s fresh 2018 low and the pair is expected to continue moving downtrend during today’s trading session. The economic calendar remains light in UK for rest of the week with only major impact news being National HPI data on Thursday and Manufacturing PMI on Friday. In US calendar for the day investors are looking for CB consumer confidence (May) update. Analysts are of opinion likeliness of bullish breakout in Sterling’s favor this week is very low as any and all news of Brexit negotiations currently indicate that British Prime Minister Theresa May continues to have a hard time swinging a Brexit deal that keeps both sides of the Channel happy.
Investors also believe that Bank of England rate expectations are firming once again and are currently of opinion for a 50% chance of 25 base point hike in August 2018. Looking at the pair in technical perspective shows high probability for continued bearish decline as trading session progresses further this week. When looking at price action in four hour chart, the current momentum and trend of pair shows a sign of decline till it hits 1.3250 in near term. Expected support and resistance for the pair are at 1.3280 / 1.3245 / 1.3210 and 1.3340 / 1.3385 / 1.3410 respectively.