GBP Weekly Forecast (May 25 – 29)

GBP Weekly Forecast (May 25 – 29)

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It’s gonna be a data-light week for sterling!

Will this keep pound pairs stuck in ranges or are there any catalysts that could spur big moves?

The previous week saw a mixed run as the U.K. currency reacted to risk sentiment and mostly downbeat data.

Here’s a list of potential catalysts you need to pay attention to:

30-year bond auction (May 28)

  • Market watchers could pay closer attention to government bond auctions as the U.K. recently sold bonds at negative rates
  • GBP traders are also likely to react to bond demand, which saw its weakest level for two-year benchmark gilts prior to BOE rate cuts
  • Note that there has been a lot of negative rates talk, especially since BOE head Bailey said that he is not ruling it out

Overall market sentiment

  • Counter currency flows for pound pairs might continue to be driven by demand for higher-yielders and safe-havens
  • The spotlight is still on COVID-19 vaccine updates, as well as plans by countries and states to ease lockdown measures
  • Market participants are also keeping an eye out for tensions between the U.S. and China, as well as risks of another uprising in Hong Kong

Technical snapshot

  • Stochastic shows that sterling is oversold against the commodity currencies.
  • In particular, GBP/NZD, GBP/AUD, and GBP/CAD could see a return in bullish vibes as sellers take a break.
GBP Pairs Stochastic from MarketMilk
GBP Pairs Stochastic from MarketMilk
  • Meanwhile, EUR/GBP is in bearish territory as Stochastic shows overbought conditions.
  • Short-term trend analysis puts most GBP currency pairs in the bearish zone.
  • Only EUR/GBP is in bullish territory, but its trend is weakening.
  HLHB Pattern-Catcher Machine Replace (June 29 – July 3)
GBP Pairs Moving Averages from MarketMilk
GBP Pairs Moving Averages from MarketMilk

Missed last week’s price action? Read GBP’s price recap for May 18 –22!

TABLE OF CONTENTS (click the following links and read again).

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