GBP price, news and analysis:
- GBP/USD continues its tentative recovery, suggesting that further modest rises are likely in the days ahead.
- UK retail sales data for February were poor ahead of the economic impact of the coronavirus.
- The Bank of England is unlikely to announce more measures to stimulate growth but might confirm its commitment to more monetary easing measures if needed.
GBP/USD gains to extend near-term
The tentative recovery in GBP/USD is continuing, with no strong signs yet of the rally running out of steam. This week’s advance has taken it from a low of 1.1447 Monday to just above 1.19 in early European trading Thursday and a near-term test of “round number” resistance at 1.20 is now possible in the hours and days ahead.
GBP/USD Price Chart, 30-Minute Timeframe (March 23-26, 2020)
Chart by IG (You can click on it for a larger image)
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One sign of an improvement in sentiment towards the pair was that dire UK retail sales data for February, before any economic damage caused by the coronavirus pandemic, failed to depress GBP/USD. There was no growth in retail sales year/year and declines were recorded for both the headline and ex-autos measures month-month.
Bank of England up next
Thursday’s session will be dominated by a statement at 1200 GMT after the scheduled March meeting of the Bank of England’s monetary policy committee. The BoE has already made two emergency cuts in UK Bank Rate so far this month and a further reduction is unlikely. However, the central bank will doubtless underscore its willingness to take even more radical measures – including an expansion of its quantitative easing policy.
Recommended by Martin Essex, MSTA
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— Written by Martin Essex, Analyst and Editor
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