How To Trade GBPUSD Fundamentals

Will GBPUSD prices find their peak here? 🤔 Keep an eye on the upcoming Bank of England rate decision, forecast to hold at 5.25%. With UK inflation on the decline and intriguing trends in the GBP CoT futures report, market dynamics are stirring. Stay tuned! 💼💰 #GBPUSD #BoE #MarketWatch

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WILL GBPUSD PRICES TOP OUT HERE

Market participants will need to pay attention to the upcoming Bank of England rate decision. The UK central bank held rates at 5.25%. The MPC vote changed with the vote to hike to change from 2 to 0 which would potentially signal the end of the tightening cycle in the UK. The United Kingdom inflation rate did fall in Feb to 3.4% continuing to show a decline. A hold makes sense here as BoE continues to target 2% inflation rate.

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Keeping an eye on the GBP CoT futures report reveals some intriguing trends.

As of July 17th, 2023, commercials were notably active in selling GBP futures at a rate not witnessed since July 2014. Despite GBP futures hovering around 1.3000 in July 2023, they dipped close to 1.2000 over an 11-week period.

Currently, we’re edging towards a similar scenario with commercial short contracts nearing the lows of July 23. Conversely, non-commercials, often large speculators acting as ‘trend followers’, have surpassed the highs of July 23.

Historically, this dynamic has hinted at a market top. Notably, price resistance appears at 1.3000, suggesting a potential upward movement before any reversal setups emerge. 

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GBPUSD

The price on the chart has traded through multiple technical levels and some observations included:

• Cable prices have fallen today after the announcement, with sellers targeting key lows such as 1.2670.
• Downside targets could be met from lows at 1.2600 and 1.2550.

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About The Author

Jonathan Kibbler

Jon Kibbler, our Senior Market Analyst, boasts over a decade of trading experience. He specializes in dissecting the intricacies of financial markets and sharing his expertise with precision. Jon’s insights have been featured at renowned events and platforms like Coindex, Forex Analytix, and Forex.com.

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