GBP/USD regains ground after US data

GBP/USD regains ground after US data and finds an equilibrium

GBP/USD was trading at 1.3632 on Thursday. Sterling found an equilibrium point after volatility triggered by a stronger dollar following US labour market data.

The number of people employed in January increased by 130 thousand, marking the largest rise in more than a year. The unemployment rate unexpectedly fell to 4.3%. Against this backdrop, investors have revised expectations for the Fed rate path. The market now fully prices in the first rate cut for July rather than June, and the probability of a move in March is estimated at less than 5%. Read more…

GBP/USD Price Forecast: Traders seem non-committal above 1.3600 amid mixed cues

The GBP/USD pair reverses an early European session dip to the 1.3600 mark touched in the aftermath of mostly disappointing UK macro data, though it lacks follow-through buying or bullish conviction. The preliminary report published by the Office for National Statistics showed that the UK economy expanded by 0.1% in the October-to-December period, matching the slow pace recorded in the third quarter. The reading also fell short of the Bank of England’s (BoE) forecast of 0.2% growth, pushing up the odds of a 25 basis points (bps) rate cut as soon as March.

The British Pound (GBP), however, largely shrugged off dovish BoE expectations amid easing UK political jitters. Following a tumultuous period sparked by fallout from the Jeffrey Epstein files and the resignation of a key aide, UK Prime Minister Keir Starmer received backing from his cabinet and Labour MPs, preventing an immediate leadership challenge. Although Starmer’s position remains damaged, the temporary stability turns out to be a key factor acting as a tailwind for the GBP/USD pair amid the lack of any meaningful US Dollar (USD) buying. Read more…

GBP/USD Elliott Wave: Cables are crossing

Back on January 14, while trading at 1.3428, we forecasted a slight dip, then rally for the beginning stages of wave (iii). Cable has moved generally as forecasted with the current decline from January 27 to February 6 larger than anticipated. This has introduced the potential for a change in the wave count we are following.

We’ve had a good scent on the GBPUSD pattern anticipating further rallies. However, since January 27, the decline to February 6 has become larger than anticipated. No Elliott wave rules have been broken, but we are becoming concerned that another pattern is in development. Read more…