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Philip Miller

GBP/USD

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Hi Philip, thanks for asking this question.

GBP/USD has actually today attempted to break below $1.2270 after it failed to move above $1.2360 resistance. The pair looks like it wants to move lower as the sellers eye a trip to $1.22, a 1-month low for GBP/USD.

These bearish developments are coming when the BoE’s senior officials are very active in the media as they are trying to reassure the business sector that further actions will be taken to support them.

After the Bank of England’s chief economist Andy Haldane issued a warning that the COVID-19 triggered economic crisis will create a long-term damage to the UK’s economy, his colleague Ben Broadbent, Deputy Governor of BoE’s Monetary Policy, reiterated that the bank will “quite probably” continue to ease in order to support the troubled economy. 

"Yes, it is quite possible that more monetary easing will be needed over time," Broadbent said.

"The committee is certainly prepared to do what is necessary to meet our remit with risks still to the downside”.

Hence, I believe that GBP may be moving lower in the coming days and weeks. Looking lower, the $1.22 mark is the next target for the bears if $1.2270 is cleared. 


 

Edited by Nile Harris

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