Daily Market Insights



Sterling Continues Its Good Run

Sterling has been keeping its growth steady in the recent days and with the Bank of England inflation report and the policy meeting that is due this week, we look for more support to make it even stronger which has been climbing at a steady phase.

The BoE's reports will be closely watched for any indication for the time frame on whether the UK interest rates will remain low. Inflation has been rising above the Bank's target.

A recent report suggests that no change in interest rates may occur at least until 2019 at the earliest, as the central bank waits to see how divorce negotiations go through with the European Union.

We shall keep a look on whether the Bank cuts its economic growth forecasts, which was raised during February. We'd probably wait to watch what the MPC (Monetary Policy Committee) members have to say and look for any hawkish indication for any adjustment from BOE.

The U.S. central bank is keeping the option of raising interest rates despite some area of trouble with the auto sales being down from last year, and some nice growth seen in the GDP with household remaining strong. And labor markets continue to grow stronger suggesting the removal of monetary accommodation at the appropriate time for the Fed.

Intraday bias in GBP/USD is trading above 1.2907 level, which gets good support base after a bounce on the 50EMA. This reinforces the expectations of continuing the bullish bias in the upcoming period, and the way is open to head towards the recently recorded top at 1.3014 on the near term basis.

The pair remains bullish for the moment while it is trading on rebound after testing the barriers, and that makes the trading settle now at the support area that appears in the chart. Some consolidations would be seen with the bullish momentum and further rise is expected from current levels. With the oscillator above 50.0 levels, we can see the pair showing sign of medium term bullish movement. An upward bias is expected towards our target projection levels and a break here later could test levels of 1.3040.

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