Market News & Analysis
GBP/USD at $1.28 on BoE Speculation
Fiona Cincotta March 4, 2020 11:02 PM
Improved sentiment following the outright Conservative win in the December election was enough to convince the BoE to stand back from an interest rate cut in January. With business and consumer confidence rising, expectations for modest economic growth across the first half of the year had been penciled in. However, a corona virus epidemic could create a demand shock and choke that growth.
Whilst a 25 basis point cut could support any economic slowdown caused by coronavirus, it also would mean that the BoE is running short of ammunition heading towards June when the UK could walk away from Brexit trade talks with the EU to prepare for a no trade deal Brexit.
Levels to watch
GBP/USD is holding steady at $1.28, in wait and see mode. Across the coming days it should become clearer as to whether efforts to contain the virus are working or whether the coronavirus outbreak will indeed become an epidemic, sending the pound back towards $1.25.
Immediate support is at $1.2770, $1.2725 and $1.2695 (200 sma).
Resistance can be seen at $1.2850 prior to strong resistance around $1.30 (trend line, 50,sma & 100 sma).
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.