BUZZ-COMMENT-Sterling slips as sideways data tempers BoE hike expectations
Oct 22 (Reuters) - Sterling traders remained reluctant on Friday to push the pound beyond recent ranges, still engaged in a tug-of-war between key resistance at 1.3831, the 50% Fibo of the 2021 range of 1.4250-1.3412, and the daily cloud base at 1.3778.
Bears found no joy probing below the daily cloud, after UK retail sales disappointed . Bulls on the other hand ran into resistance at 1.3815 after UK PMIs beat forecasts.
The recent failures above 1.3830 may hint a top has been put in for GBP/USD. Despite recent hawkish leanings by some BoE members, new chief economist Huw Pill said he expects inflation to rise to 5% in early 2022, and then recede in H2 2022, the FT reported https://on.ft.com/3B3OIQY.
Pill also said “maybe there’s a bit too much excitement in the focus on rates right now,” and while he considers the November meeting live, he sees no need for restrictive settings that exceed 0.75%.
The key driver for recent GBP/USD gains has been rising expectations of an early UK rate rise BOEWATCH. Should the BoE blink on higher rates at the Nov. 4 MPC meeting, GBP/USD is likely to reverse recent gains putting 2021 lows by 1.3412 in sharper focus.
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GBP Chart: https://tmsnrt.rs/3niEkzP
(Paul Spirgel is a Reuters market analyst. The views expressed are his own)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.