The GBPUSD pair also has been trading slowly as of this morning , to mark the usual thing that happens at the beginning of every week. There has not been much going on globally, over the weekend and the same is being reflected in the markets as of now as they have been very slow since morning. The pair trades just below the key resistance of 1.3030 as of this writing and we believe that this resistance will hold for the short term.
GBPUSD To Be Well Bid
If the region does manage to hold the price, we might see a bit of profit taking in the pair as the traders and the investors prepare themselves for the slew of data that is going to roll in during the second half of the week. Most of this data would be from the US and we can be sure that the dollar would be the focus this week after it had received a pounding last week. It is a measure of the weakness in the dollar that even the embattled pound has been able to make some strong progress against it.
Of course, the weakness in the dollar is not the only reason that we are seeing the GBPUSD pair going up as the pound has been helped higher by the hawkish BOE in the recent days. Last week, Carney gave the firmest hint that the BOE was looking towards a reversal in the rate policy and this was a large boost to the pound which had been under the pump since the beginning of the month due to the surprising results from the UK elections. It was this hawkishness from Carney that has helped the pair to rocket through 1.29 and then further through 1.30 and rest just below 1.3030 as of this writing. We can expect the pair to remain bid during the short term.
Looking ahead to the rest of the day, we have the Manufacturing PMI data from the UK later on in the day and also the ISM Manufacturing data from the US and all the data in the coming week will be watched closely to see if the UK continues to throw up strong data, as has been the trend over the last few months, and whether there is any improvement in the US data, which has been hit hard by bad data in recent times.
This article was originally posted on FX Empire