GBP Weekly Forecast (May 4 – 8)

The BOE decision is the main event on the U.K. economic calendar for this week. Here’s what market watchers are expecting.

In the previous week, sterling was able to finish as a net winner, only returning some wins when risk-off flows surged towards the end.

Missed last week’s price action? Read GBP’s price recap for April 27 – May 1!

Here’s what’s coming up next:

BOE policy decision (May 7, 7:00 am GMT)

• Policymakers likely to keep rates on hold at 0.10%
• Asset purchases also likely to stay unchanged at 645 billion GBP
• MPC minutes up for release could show unanimous vote to keep policy unchanged
• Remarks on impact of COVID-19 and lockdown on economy could also affect GBP direction

Technical snapshot

• Long-term trend strength analysis paints a mixed picture of pound pairs, with GBP/CAD and GBP/NZD looking the most bullish of the bunch.

• On the flip side, GBP/CHF and GBP/JPY are deep in bearish territory.

• Williams %R and the rest of the overbought/oversold indicators aren’t offering strong clues at the moment.

• GBP/CAD appears to be approaching overbought levels while GBP/JPY could be oversold soon.