GBP/USD: forecast for September 14-20
By Elizabeth Belugina
The Bank of England left monetary policy unchanged. Only one member of the Monetary Policy Committee (MPC) voted to raise the benchmark interest rate. One of the main things was that the central bank played down the impact of China’s stock-market slump on Britain’s economic prospects. In addition, some members saw continued upside risks to the inflation outlook. Overall, the Bank of England was not as dovish as expected allowing the cable to rise to 1.5475. The market expects the central bank to raise rates in the beginning of 2016.
At the same time, the series of weak UK economic data releases cast doubt over the BOE’s outlook on the interest rates and may limit the sterling’s advance together with uncertainty ahead of the US Federal Reserve’s meeting on Thursday.
GBP/USD is facing the bearish Ichimoku Cloud on the weekly chart. The pair approached significant resistance area of 1.5515/35 (100- and 55-day MAs). However, sterling has managed to settle above the 200-day MA at 1.5350 and a move below this support is needed to return the full power to the bears. Further support is at 1.5250.
Next week the UK will release inflation figures on Tuesday, labor market data on Wednesday and retail sales on Thursday. In addition, on Saturday, September 12, the new leader of Britain's main opposition Labour Party will be announced. The leader will likely be from the party’s left wing, which opposes austerity measures, so this may lead to some bearish pressure on sterling.