British Pound (GBP), Weekly Forecast: BOE Members on Alert

Despite a difficult week for GBP/ US, the Pound is supported by expectations of a more hawkish Bank of England. As markets expect the Bank of England to adjust its monetary policy to better reflect current economic conditions, the lead-up to August's MPC meeting draws more attention.

British Pound (GBP), Weekly Forecast: BOE Members on Alert

On Thursday, Michael Saunders was the focal point. He mentioned that inflation could be stubbornly high over the next months. This suggested the possibility of an interest-rate in the first half 2022. Ramsden had previously made a similar argument about the rapid changes since May's last forecast, which allowed for the possibility of tapering sooner that originally anticipated.

We can see the UK calendar for next weeks and we have another BOE member (Haskel), and little else until the June retail sales report and PMIs are published Friday.

GBP/USD crosses are showing that GBP/USD could break below 1.30 if it fails to maintain above its 200-DMA (1.3808) heading into the next week. Although the Stochastic has a slight negative bias, there is still potential for a swing towards 1.39. This resistance is difficult to crack. The pressure on EUR/GBP continues to be negative. The pair was trading near the 0.85 mark earlier in the week, as it attempts consolidation and to break out of its descending channel that it has been trading for the past 3 months. Breaking below this level will likely lead to a new attempt to break below the April low of 0.8472.

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