GBP/USD and EUR/GBP – Prices, Charts, and Analysis

• ECB and Fed are expected to hike interest rates next week.
• Little high-impact data in the UK next week will leave Sterling vulnerable.

The British Pound is ending the week on a positive note with cable back above 1.2500 and with EUR/GBP testing support at 0.8800. Both pairs however will come under pressure next week when the Federal Reserve (Fed) and the European Central Bank (ECB) announce their latest monetary policy decisions on Wednesday and Thursday respectively. Both are seen lifting interest rates higher but it is the all-important post-release press conferences that will likely drive price action in both the US dollar and the Euro. With little to no data to help steer the British Pound, GBP/USD, and EUR/GBP will be vulnerable to external forces next week.

GBP/USD is pushing higher going into the weekend with the pair printing a fresh two-week high. Resistance at 1:2547 is close and may come under pressure and a break above here would see cable back at levels last seen in June 2022. The technical setup looks positive for a further move higher with GBP/USD supported by the 20-day simple moving average. The Average True Range indicator – the red line at the bottom of the chart – shows the lack of volatility in the pair over the few weeks.

GBP/USD Daily Price Chart – April 28, 2023

Chart via TradingView

GBP/USD Retail Sentiment is Bullish

Retail trader data show 38.09% of traders are net-long with the ratio of traders short to long at 1.63 to 1.The number of traders net-long is 4.31% lower than yesterday and 19.38% lower from last week, while the number of traders net-short is 0.53% higher than yesterday and 7.20% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBP/USD prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger GBP/USD-bullish contrarian trading bias.

EUR/GBP is also showing signs of a mildly stronger Sterling with the pair starting to move lower and breaking a series of higher lows and higher highs. Resistance just above 0.8866 continues to hold leaving the pair vulnerable to a move back to prior support at 0.8712.

EUR/GBP Daily Price Chart – April 28, 2023

Chart via TradingView

Retail trader data shows 42.62% of traders are net-long with the ratio of traders short to long at 1.35 to 1. Recent changes in sentiment warn that the current EUR/GBP price trend may soon reverse lower despite the fact traders remain net short.

What is your view on the GBP/USD and EUR/GBP – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.