- The GBP/USD is falling as a strong US dollar leads the way.
- Fed mood, as well as the concerns linked with the Russian issue, are driving forces.
- Moving forward, market fundamentals will be key.
The GBP/USD outlook at the start of the London session is on the bearish side, as we see a stronger greenback.
Hawkish Fed
Markets appear to be convinced that the US Federal Reserve would raise interest rates more aggressively to confront persistently rising inflation.
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Last week, hawkish comments by New York Fed President John Williams underlined the bets, which were interpreted as further evidence that conservative officials are on board for larger rate rises even more.
Dovish BoE
Meanwhile, the mood surrounding the Bank of England is dovish after the dovish rise given in March, owing to concerns about the economic prospects. Nonetheless, higher-than-expected inflation in the coming weeks may put further pressure on the Fed to move more aggressively.
The Russian-Ukrainian stalemate
There is still no evidence of progress in the two countries’ peace negotiations. Dmytro Kuleba, Ukraine’s Foreign Minister, stated that no recent diplomatic interactions between Russia and Ukraine over the weekend.
He stated that the situation at Mariupol’s port, which he termed “dire,” may represent a “red line” along the road of discussions.
GBP/USD data events ahead
We don’t have anything notable regarding the GBP and USD in the doc. We’ll see NAHB Housing Market later in the New York session. It will, however, have little to no influence on the couple.
The big event will be Fed Chair Jerome Powell’s speech, scheduled for later this week.
What’s next to watch for GBP/USD outlook?
Market fundamentals will become increasingly important in the future. The ongoing Russia-Ukraine conflict and the general risk-off mindset can provide extra support to the safe-haven buck while putting downward pressure on the GBP/USD.
GBP/USD technical outlook: Trading in red for now
The GBP/USD price is traveling at the 1.3012 level. So far, the pair has lost 0.34%. The price is below 20, 50, 100, and 200 SMAs, signifying a bearish trend.
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The next key resistance level for the pair is 1.3074. If we see a rise beyond this level, the cable can climb towards the price goes above this level, it can further climb towards 1.3094.
On the other hand, the next support is at 1.3000. If the price dips below this level, we can see it further drifting towards the 1.2972 level.
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Saqib Iqbal
