Cable Failed to Break the 1.2460 Mark
- The Bank of England kept the interest rates unchanged
- On Sunday, PM Boris Johnson will declare his decision about lockdown extension
- The DXY Index has been under the 100 level which considered a negative territory
4-Hr Time Frame:
From a technical view, the British pound has been ranging between levels (1.2600 – 1.2265) since the beginning of April. A mid-level is noticed where Cable has respected it and could not close above it on Friday. This could mean that the bears are still in control.
Big movements will not be seen before the pair succeeds to break out one of the sides.
Since the USD is the quote in the GBP/USD pair, the DXY index might give us an idea of how Cable will move in the coming days.
The DXY index is also ranging between two levels the 100.85 and 98.85. However, the 100 level is a crucial level for the greenback. Closing above it, investors see the U.S. Dollar in positive territory.
On the other hand, closing below it, means the bears took control, and it entered the negative territory.
On Friday, the greenback failed to break this level leaving a bearish sentiment among the investors.
The Bank of England kept the interest rates unchanged (0.25%) which led to a bullish movement in the Cable on Thursday. This did not last long since Britain is still suffering from the pandemic, as well there are concerns regarding the Brexit negotiations.
“Britain is facing its worst recession in 300 years, according to the latest scenario from the Bank of England. The BoE estimates that GDP will plunge by 25% this quarter, with unemployment hitting 9%, due to the abrupt halt to activity under the Covid-19 lockdowns”.
On Sunday, the PM Boris Johnson will declare his roadmap about easing the lockdown. If investors find positivity in his speech, we might see an appreciation of Cable. However, if the Prime minister was not optimistic about the situation, the investors will put selling pressure on the pound.