On Tuesday, March 29, in the London session, GBP/USD is trying to recover some of its previous losses.
- GBP/USD recovers a bit in the London session, as it is trying to stay above the 1.3060 mark.
- DXY lost ground amid the Russian demands.
- The US NFP and the UK GDP are the important factors going ahead.
GBP/USD fundamental forecast
As investors’ risk appetite rises and risk-perceived assets acquire greater demand, the GBP/USD pair has received some bids near 1.3080.
Previously, the Cable was losing despite the Bank of England’s tightening monetary policy.
Dovish BoE
Following dovish comments by Bank of England (BoE) Governor Bailey yesterday, the pound has started the week weaker.
BoE Governor Bailey noted that the BoE reduced its future rate guidance to reflect the significant economic uncertainty caused by the Ukraine crisis.
The UK rate market currently expects the BoE to raise interest rates by 25 basis points at subsequent meetings, for about 136 basis points by the end of the year.
In addition, the UK’s Office for National Statistics published the annual Consumer Price Index (CPI) at 6.2 percent, which was much higher than market expectations and prior readings of 5.9 percent and 5.5 percent, respectively.
A higher-than-expected report of UK inflation may drive the BOE to raise interest rates again in May.
DXY blues
The US dollar index has hit a roadblock after failing to set a new nine-month high and is in danger of falling below 99.00. Furthermore, Friday, the 10-year US Treasury yield hangs around 2.46 percent ahead of US non-farm payrolls (NFP).
Russian demands
Ukraine’s President, Volodymyr Zelensky, has stated that the country is willing to discuss accepting a neutral status as part of a peace deal with Russia, but that the decision would have to be guaranteed by third parties and put to the vote.
The DXY has been pounded at 99.30 due to increased risk appetite following the absence of three major Moscow demands denazification, demilitarization, and legal protection for the Russian language in Ukraine.
Key data releases from the UK
Investors will also pay close attention to the quarterly and annual UK Gross Domestic Product (GDP) figures revealed on Thursday in the English doc.
Key data releases from the US
This week, the US doc is busy with JOLTS Jobs Openings today and ADP non-farm employment change tomorrow. In addition, on Friday, we have the all-important NFP.
What’s next?
Looking ahead, the situation between Russia-Ukraine and the US doc will be the key factors this week.
GBP/USD technical analysis: slight recovery, but for how long?
GBP/USD is now trying to stay above the 1.3080 level. The pair is below its 100-day moving average on the chart, and the RSI is pointing upwards. So far, the pair has gained 0.24% on the 4H chart.
GBP/USD is now hitting the 1.3090 level. A fall below 1.3060 will bring the pair towards the 1.3030 support level. If the pair falls below this level again, it will challenge the next support level, at 1.3000.
On the upside, the Cable can go towards the next resistance level, around 1.3100. A break over the resistance level of 1.3140 will pave the door for a test of the following resistance level of 1.3160.
