It’s gonna be a data-light week for sterling!
Will this keep pound pairs stuck in ranges or are there any catalysts that could spur big moves?
The previous week saw a mixed run as the U.K. currency reacted to risk sentiment and mostly downbeat data.
Here’s a list of potential catalysts you need to pay attention to:
30-year bond auction (May 28)
- Market watchers could pay closer attention to government bond auctions as the U.K. recently sold bonds at negative rates
- GBP traders are also likely to react to bond demand, which saw its weakest level for two-year benchmark gilts prior to BOE rate cuts
- Note that there has been a lot of negative rates talk, especially since BOE head Bailey said that he is not ruling it out
Overall market sentiment
- Counter currency flows for pound pairs might continue to be driven by demand for higher-yielders and safe-havens
- The spotlight is still on COVID-19 vaccine updates, as well as plans by countries and states to ease lockdown measures
- Market participants are also keeping an eye out for tensions between the U.S. and China, as well as risks of another uprising in Hong Kong
Technical snapshot
- Stochastic shows that sterling is oversold against the commodity currencies.
- In particular, GBP/NZD, GBP/AUD, and GBP/CAD could see a return in bullish vibes as sellers take a break.
- Meanwhile, EUR/GBP is in bearish territory as Stochastic shows overbought conditions.
- Short-term trend analysis puts most GBP currency pairs in the bearish zone.
- Only EUR/GBP is in bullish territory, but its trend is weakening.
Missed last week’s price action? Read GBP’s price recap for May 18 –22!
