GBPUSD TECHS: Key Resistance Remains Exposed
- RES 4: 1.3305 High Oct 2 ‘24
- RES 3: 1.3274 High Oct 3 ‘24
- RES 2: 1.3207 High Apr 3 and the bull trigger
- RES 1: 1.3201 High Apr 14
- PRICE: 1.3182 @ 15:47 BST Apr 14
- SUP 1: 1.2907/1.2709 20-day EMA / Low Apr 7 and a bear trigger
- SUP 2: 1.2662 2.0% 10-dma envelope
- SUP 3: 1.2654 50.0% retracement of the Jan 13 - Apr 3 bull cycle
- SUP 4: 1.2559 Low Feb 28
GBPUSD maintains a bullish tone and the pair is building on last week’s gains. The trend condition remains bullish and recent weakness appears to have been a correction. Moving average studies remain in a bull mode position that highlights a dominant uptrend. An extension higher would open key resistance and the bull trigger is 1.3207, the Apr 3 high. Key support has been defined at 1.2709, the Apr 7 low.
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FED: March Economic Projections: Higher Inflation, Weaker Growth, Same Rates
The MNI Markets Team’s expectations for the updated Economic Projections in the March SEP are below.
- The unemployment rate is likely to rise slightly for 2025 alongside a downgrade in GDP growth, while the 2025 core and headline PCE inflation projections are set to rise again. Changes to later years will likely be limited, however.
- More detail on the shift in Fed funds rate medians is in our meeting preview - we will add more color next week.
FED: Market Pricing Nearly 3 2025 Cuts As Conditions Tighten
Amid rising government policy uncertainty, sentiment among businesses and consumers has fallen sharply since the start of the year, while equities and the dollar have reversed their post-election rise. Overall, financial conditions have tightened, even if stress is not yet mounting, e.g. no major widening of credit spreads (the accompanying chart shows the Fed’s financial conditions impulse index but only through January).
- Combined with growth fears, this has affected expectations for the Fed’s rate path, with around 18bp more cuts expected in 2025 compared with what was seen after the January FOMC. 65bp of cuts are priced for the year as a whole. 2025 cut pricing reached 71bp before the February inflation data and 76bp before the February payrolls report.
- A rate cut is seen with near zero probability for March’s meeting, but the first full cut is just about priced for June, with a second nearly priced by September.
- Chair Powell has no reason to endorse or refute these expectations – he’s likely to be happy with a press conference that ends with little discernable change in pricing.
CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
- CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
