Currency Analyst since 2010

GBP/USD: outlook for August 10-16

By Elizabeth Belugina

The pound had a busy week. The most important day was the so-called super Thursday, when the Bank of England’s meeting was for the first time ever accompanied with the release of its minutes. British central bank turned out to be less hawkish than the market expected: only one member of the Monetary Policy Committee voted for the rate hike, while traders expected at least two policymakers to do so. The minutes also showed that some policy makers thought it might be too soon to raise interest rates, with the pound’s strength offsetting rising inflation. 

Still, the Bank of England’s statement did not change much and the rate hike remains on the table early in 2016, so British pound was not stripped of the fundamental support. At the same, time cable will stay under pressure in the short-term given the good NFP release in America.

Next week the most important thing to watch will be British labor market data on Wednesday. The previous release was surprisingly weak, so we will be able to see whether the situation has improved.

GBP/USD breached down support line since April. Resistance at 1.5550 is rather strong. Supportisat 1.5400/5385, 1.5330 (July low) and 1.5250.

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