GBPUSD Economic Calendar

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First week of April is not expected to be an eventful one for the British Pound in terms of Economic Data, thus rather than a major direction we expect consolidation around 1.42-1.44 level up to 14th of April when BoE releases its interest-rate decision. Technically speaking, a major triangle has been under development on the daily chart of GBP/USD for about 2 months now, enforcing our sideways bias suggested by the fundamental factors.

One must not forget though that there will be daily statements of FOMC members from the US causing minor volatility, while endorsement of dovish outlook from Janet Yellen on April 7th speech may boost a short-term bounce of GBP/USD to our upper targets of 1.440-1.442.

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GBPUSD daily April 4 2016

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Another case for a rebound in the British Pound is suggested by the upward revision of 4Q GDP Report, with a 2.1% annual rate of growth in the last quarter of 2015, which if followed by strong Construction and Services PMI reports this week, might suggest that region’s economic output is improving giving BoE incentives to integrate a more hawkish tone. Even though Monetary Policy Committee is expected not to change any of its policies ahead of the BRexit Referendum in June, there are higher chances for GBP/USD to trade sideways or upward rather than slide.

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In addition to a boost from British Economic data, a relief rally in GBP/USD may be fueled by Fed’s actions and its officials’ tone. Fed officials do not seem to be in a hurry to further normalize interest rates, as they are committed to “gradually” transit from the accomm odative monetary policy. This gradual approach is likely to cause short-term rallies for the British Pound as the greenback get’s sold off due to lower chances of rate hike in the first half of 2016.

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Conclusion: As long as GBP/USD holds its 1.40 levels, odds are in favor of a relief rally up to 1.44, and in the worst case scenario we should expect a sideways price action in attempts of consolidation of the triangle.

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