Sterling attempted to rally on Monday morning after a dismal week of losses last week. Regardless of its best efforts, GBP was unable to make any substantial moves to the upside as it gave back its daily gains showing “signs of weakness again”. One economist noted that with GBPUSD in particular, “the shape of the candlestick of course is very weak, and as a result it is difficult to imagine a scenario where” Sterling is able to break beyond 1.40. They went on to claim that the 1.40 level “has been like a brick wall, and as a result it is going to take something rather special to get above it”. Despite this gloomy outlook, it is important to note that if Cable is able to go above 1.40, analysts predict the pair could “have the ability to go looking towards the 1.42 handle”.
After opening the day at 1.3897, GBPUSD experienced a harsh pullback of over 50 pips from 2-day highs of 1.3929. Cable went on to close the day at 1.3892, not far from where it opened. A slight rise in US Bond yields yesterday helped underpin the USD and exerted pressure on the pair.
GBPEUR was able to better it’s position on Monday despite remaining below the 1.15 handle. The pair started the day at 1.1479 and closed at 1.1498.
EURUSD in contrast made a loss on Monday as a stronger USD proved too much to handle for the Euro. After opening the week at 1.2106, the pair finished Monday at 1.2081. With the latest FOMC meeting on Wednesday, “expectations that the Fed will keep rates low for a longer period held the USD bulls from placing aggressive bets.”
On the data front, it’s a quiet schedule for Tuesday. Overnight BOJ gave their latest Interest Decision and Quarterly Outlook Report. This afternoon, the US will release its CB Consumer Confidence for April.
