英镑兑美元周报：死亡交叉迫在眉睫，进一步下行的暗示

After hitting a peak at 1.4248 on 1^英石 June 2021, the GBPUSD currency pair has since been on a downtrend and it currently sits around its November 2020 low. The bearish move of the pair, similar to the EURUSD, could be largely attributed to the strengthening US Dollar. The US Dollar Index (DXY) which gauges the greenback’s strength against a basket of rival currencies, jumped to a two-year high amid the global risk-off sentiment.

Market risk aversion amid Russo-Ukraine conflict

Despite the attempts of the Russian and Ukrainian officials to come to an agreement through peace talks, the situation has worsened in Ukraine after they reached an impasse. Till date, Russia’s invasion has damaged up to 30% of Ukraine’s infrastructure and the war is still escalating. Mayor of Mariupol, a city in Ukraine said that Russia is targeting civilians and had forcibly removed over 40,000 people to Russia or Russian-controlled regions in Ukraine. Moldovan foreign minister, Nicu Popescu also shed some light on the dire situation and mentioned that “everyone in Europe feels less secure than just two months ago.”

At times of market uncertainty, the safe haven currency US Dollar tends to strengthen.

鹰派美联储

Apart from the risk-aversion, another major driver for the US dollar is the monetary policy tightening by the US Federal Reserve. The Fed had started policy tightening in its March meeting with a 0.25% rate hike with markets anticipating more aggressive hikes in the subsequent meetings.

St. Louis Federal Reserve Bank President James Bullard reinforced his hawkish stance on Monday by calling to increase the interest rates to 3.5% by end of 2022 in order to control the 40-year-high inflation. This means that the Fed would have to raise rates by 0.50% each time in the remaining six meetings this year. The Fed official also does not rule out a 0.75% rate increase if needed.

A hawkish central bank is typically bullish for a country’s currency, as increased yields boost demand for the currency.

技术分析

On the weekly timeframe, the GBPUSD had completed a large head and shoulders formation on 7^日 March 2022. This is a typical bearish reversal pattern which when completed, prices are likely to fall to a magnitude similar to the height of the pattern’s “head”. The breakdown was validated when GBPUSD successfully retested and was subsequently rejected off the neckline support-turned-resistance on 23^路 March. In terms of technical indicators, the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) both show that bearish momentum is in full swing for the currency pair.

Another signal for further weakness in the pair is a looming Death Cross which is defined by a crossover of the 200 day exponential moving average (200 EMA) above the shorter term 50 day EMA.

Looking ahead, psychological level at 1.30 is an important support level to watch. If price successfully closes below this level, the pair will be met with a dynamic support trend line that connects lower lows since February 2021.

Tuesday, April 19

USD – Building Permits (MoM)(Mar), Housing Starts (MoM)(Mar)

Wednesday, April 20

USD – Fed’s Evans speech, IMF Meeting

Thursday, April 21

USD – Fed’s Beige Book, IMF Meeting, Initial Jobless Claims(Apr 15), Initial Jobless Claims 4-week average (Apr 15), Philadelphia Fed Manufacturing Survey(Apr), Fed’s Chair Powell speech

GBP – BoE’s Mann speech

Friday, April 22

USD – Fed’s Chair Powell speech, IMF Meeting, S&P Global Composite PMI(Apr), S&P Global Manufacturing PMI(Apr), S&P Global Services PMI(Apr)

GBP – BoE’s Governor Bailey speech, GfK Consumer Confidence(Apr), Retail Sales (MoM)(Mar), Retail Sales (YoY)(Mar), Retail Sales ex-Fuel (MoM)(Mar), Retail Sales ex-Fuel (YoY)(Mar), S&P Global/CIPS Manufacturing PMI(Apr), S&P Global/CIPS Services PMI(Apr), BoE’s Governor Bailey speech