The GBP/USD is in a tight range as investors reflect on the recent weak numbers from the UK and the upcoming Fed and Bank of England (BOE) interest rate decisions.
What happened: On Friday, the Office of National Statistics (ONS) published relatively weak industrial and manufacturing production numbers. This weak performance was mostly because of the national lockdown that was imposed in January by the Boris Johnson administration.
However, because of the fast vaccination process, these numbers will likely keep improving in the near term.
This week, the GBP/USD will be affected by the Fed and BOE decisions that will happen on Wednesday and Thursday, respectively. Like last week’s ECB decision, analysts expect that the two banks will leave interest rates and QE unchanged. Still, analysts will be watching out for the language used by the bank especially now that Treasury yields are rising.
On the three-hour chart, we see that the GBP/USD pair has been under pressure in the past few sessions. The pair is slightly below the first support of the Schiff Pitchfork tool. It is also slightly above the 50% Fibonacci retracement level and is slightly below the middle line of the Bollinger Bands.
Therefore, the outlook for the pair is bearish so long as the price is below the support of pitchfork. In this case, there is a possibility that it will retest last Friday’s low at 1.3865. However, any moves above last week’s high at 1.400 will mean that the pair has more upside ahead.
