GBPUSD M30 Time Frame Analysis Market is moving in the Descending channel and the Market has reached the Lower high area of the Channel.
Where is GBPUSD Today
The GBPUSD marketplace has gone downhill this past couple of months. Whenever we seem to get a glimmer of hope that its market value is finally on the mends, it seems to come crashing down once again. Just earlier today, this currency pair had seen the weakest point it has been in for quite some time when it reached values of about 1.226. It has since climbed a bit to the 1.229 region before falling back down to where it now floating, the 1.228 region.
It is believed that the recent speech by BOE’s economist as well as the Federal Reserve has a major role in causing these bearish conditions for the GBPUSD pair. Looking at a larger time frame, this major currency pair still shows bearish market conditions.
BOE Pill Speech
BOE Chief Economist Huw Pill recently held a speech after the release of the updated interest rate policy for the Bank of England. The Bank of England recently increased its interest rates by a quarter of a basis point. This made their base interest rate reach 1%. This was the fourth consecutive time the BOE had to increase its interest rates in order to combat the inflation crisis in the country. Huw Pill went on to explain how he was unhappy about the speed at which inflation was growing. He admitted that it was becoming rather difficult for the ordinary Brit to afford their usual cost of living. Huw Pill further told the people how the entire reason they are being so strict with tightening their monetary policies is to avoid massive inflation like in the 1970s.
In his speech, Huw Pill reveals, “I am uncomfortable that the central bank members are forecasting a 10% rate of inflation, which is well above the Bank’s long-term target of 2%. Of course, that discomfort has to be seen in the context of the real impact of the cost of the living squeeze on households and firms here in the U.K., it’s more painful for them than the discomfort from a policymaker’s point of view. The Bank of England is trying to use monetary policy to try to ensure that those drivers of inflation don’t result in persistently higher prices, and create a stagflation environment like that of the 1970s. But the central bank wants to bring inflation back down to target without introducing unnecessary volatility into the economy. On that note, I believe the BOE should continue to be aggressive with its hikes.”
The Federal Reserve recently released its FOMC statement where it talked about some of the recent economic and monetary updates they brought to their policies in light of the recent inflation and war crisis occurring around them. Recently we also found out that the Feds increased their interest rates by 75 basis points. This made their interest rates reach the range of 0.75%-1%. It hasn’t seen these numbers in quite a long time. The oil shortages all over the US and the rest of the world is certainly not helping the fact that people are already unable to afford basic everyday essentials. This oil shortage has caused the oil prices to rise tenfold, therefore, making the majority of the population wish they had made the decision to get a Tesla.
In the FOMC statement, the Feds revealed, “The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With appropriate firming in the stance of monetary policy, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3/4 to 1 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee decided to begin reducing its holdings of Treasury securities and agency debt, and agency mortgage-backed securities on June 1, as described in the Plans for Reducing the Size of the Federal Reserve’s Balance Sheet that was issued in conjunction with this statement. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.”
Boris Struggles For Support
Boris Johnson is finally coming to realize that he is not as popular as he thought he was. As election season is approaching, the current Prime Minister of the UK, Boris Johnson, is hopeful that he would be able to reclaim his thrown once again. He had always been very blunt and harsh with his words during his rule. Many people would often say he lacked empathy and was not fit to dictate orders to the citizens of the country. No one would take any of his speeches or statements seriously and to the majority of the population, this man was a walking meme. Everyone was just waiting for him to publicly humiliate himself once again in order to enjoy in his misery. Needless to say, it is pretty evident that there is almost zero chance that the people would want him to be reelected as their Prime Minister.
Tom Tugendhat, a regular critic of the Prime Minister, had been asked to give his thoughts on this current tricky situation. He states, “It depends on the voter whether Mr. Johnson is an electoral asset or not. He has always been a divisive character and he has always been somebody who has communicated his message extremely clearly. Jacob Rees-Mogg, the minister for Brexit opportunities, also reveals, “The Government is doing the supply-side reforms which will ensure that the country becomes more economically competitive and efficient. The Government can change things over the longer and medium term, it cannot change what is going to happen over the next few weeks and months.”
Upcoming Important Events
There are a couple of important upcoming events that we need to keep an eye out for. Later today, we’re expecting the release of a speech by the FOMC Bostic as well as the BOE Saunders. They are expected to discuss the recent release in the economic policies. We are also expecting the release of Germany’s Economic Sentiment early tomorrow. This will reveal the true conditions of the German economy. German’s Mauderer will also be speaking later tomorrow after the release of this statement.