- GBP / USD struggles to find a firm direction and is moving into a range during the European session on Thursday.
- Investors appear reluctant ahead of the Bank of England’s monetary policy decision and the Scottish elections on Thursday.
- The emergence of new selling around the USD offers some support to the pair and helps limit the decline.
The pair GBP/USD extends its side consolidation price action during the first half of the European session and remains trapped within a range around the 1.3900 level. At the time of writing, the pair remains in the region of daily highs near 1.3920.
The pair has struggled to capitalize on this week’s solid bounce from the 1.3800 level, the low of April 16, and has been oscillating within a range. for the second day in a row on Thursday. Investors now seem reluctant to open aggressive positions and prefer to stay on the sidelines ahead of key risk events on Thursday, such as the monetary policy decision of the Bank of England and the elections to the Scottish Parliament.
The BoE is expected to maintain the status quo at the end of the May meeting. The decision will be accompanied by updated economic projections, which could instill some volatility around the British pound. In the meantime, the result of the Scottish elections is considered a referendum on the independence of the country from the UK, which will also play a key role in boosting the British pound in the short term.
However, the pair’s fall remains supported, at least for the moment, amid a pullback in the US dollar from the highs of two weeks. Unimpressive macroeconomic data from the United States on Wednesday reaffirmed the market expectations that the Fed will keep interest rates low for a longer period. This, coupled with the underlying bullish sentiment in financial markets, has acted as a headwind for the safe-haven US dollar.
This makes it prudent to wait for a sustained breakout of the tight trading range before investors begin to position themselves for the next directional move in GBP / USD.
GBP / USD technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
