GBP/USD is predicted to remain side-lined in the next weeks, noted FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.
24-hour view: “We highlighted yesterday that ‘momentum indicators are turning neutral’ and we expected GBP to ‘trade sideways within a range of 1.2490/1.2590’. Our view for sideway-trading was not wrong even though GBP traded within a narrower range than expected (1.2488/1.2557). The underlying tone has softened somewhat and GBP could drift lower from here. However, the major support at 1.2430 is unlikely to come into the picture (there is another support at 1.2460). Resistance is at 1.2525 followed by 1.2550.”
Net 1-3 weeks: “Last Friday (03 Jun, spot at 1.2570), we highlighted the outlook for GBP is mixed and we expected GBP to trade between 1.2430 and 1.2670. GBP subsequently traded well within the range. While shorter-term downward momentum has improved somewhat, we expect GBP to trade sideways for now, albeit within a narrower range of 1.2430/1.2600.”
EUR/USD sees a dead cat bounce above 1.0600, warrants downside ahead of US Inflation
EUR/USD is bided around 1.0610 as DXY eases mildly after hitting a fresh weekly high at 103.37. A neutral policy stance by the ECB has weakened the shared currency bulls. The DXY is expected to resume upside as the US inflation is seen stable at above 8%.
GBP/USD oscillates below 1.2500 ahead of US Inflation
The GBP/USD pair is balancing below the psychological support of 1.2500 and is expected to imbalance lower as investors are dumping the risk-sensitive assets amid uncertainty over the release of the US inflation. The cable witnessed a steep fall on Thursday after failing to overstep the critical hurdle of 1.2560.
Gold at a critical juncture, US inflation holds the key
Gold Price is nursing losses below $1,850, as traders gear up for the all-important US inflation release, which will provide fresh hints on the Fed’s rate hike guidance. XAU/USD could see a decisive downside break on hotter US inflation.