The GBP/USD pair will likely remain in this range on Tuesday.

Bullish View

• Buy the GBP/USD pair and set a take-profit at 1.2667.
• Add a stop-loss at 1.2467.
• Timeline: 1 day.

Bearish View

• Set a sell-stop at 1.2490 and a take-profit at 1.2400.
• Add a stop-loss at 1.2550.

The GBP/USD pair moved sideways as political temperatures rose. The pair is trading at 1.2540, which is slightly below last week’s high of 1.2660. The price is about 3% above its lowest level in May this year.

Boris Johnson Survives Impeachment

The GBP/USD pair had a mild reaction to the latest political crisis in the UK. On Monday, Boris Johnson survived his first impeachment process as anger of 2020s Downing Street parties continued.

The impeachment process moved into high gear after the proponents gained the 54 letters that were needed. However, they faced an uphill battle where they needed 180 votes for the impeachment to go on.

Now, with the impeachment process failed, it means that another vote will not happen for 12 months, which could give Johnson more clarity on how he runs the government. However, it also means that there will be more division among the ruling party members.

The GBP/USD pair will react mildly to the latest composite and services PMI numbers from the UK. these numbers are expected to show that output of the services sector was relatively strong last month as demand rose.

However, the main concern among most service providers like hotels and restaurants is that the cost of doing business has continued rising.

These numbers will come out a week ahead of the upcoming interest rate decision by the Bank of England (BOE). With inflation at elevated levels, there is a likelihood that the bank will hike rates for the fifth straight meeting.

The other important data to watch this week will be the upcoming US consumer inflation data. Analysts polled by Reuters expect that inflation in the US moderated slightly even as it remained close to its highest level in over 40 years.

GBP/USD Forecast

The GBP/USD pair rose to the key resistance level at 1.2667 last week. This was its highest level since April 26th. It also moved to the 25-period and 50-period moving averages while the MACD is slightly below the neutral point.

The pair is also along the 38.2% Fibonacci retracement level. Therefore, the GBP/USD pair will likely remain in this range on Tuesday. The key support and resistance levels to watch will be at 1.2667 and 1.2450.

The pair will likely keep falling as bears target the neckline of the neckline at about 37,200.

Bearish View

• Sell the BTC/USD pair and set a take-profit at 36,000.
• Add a stop-loss at 40,000.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 39,250 and a take-profit 41,000.
• Add a stop-loss at 37,000.

The BTC/USD pair remained in a tight range as investors reacted to critical statements by Warren Buffett and Charlie Munger. Bitcoin is trading at $38,490, where it has been in the past few days. This price is about 20% below the highest level in April.

Bitcoin Still in Consolidation

The BTC/USD pair has been in a strong consolidation phase as investors reflect on the relatively strong US dollar. The dollar index has jumped to the highest level in years as investors focused on the upcoming interest rate decision.

Economists expect that the Fed will hike interest rates by 0.50% and then start implementing its quantitative tightening (QT) policy. In most cases, risky assets like Bitcoin and stocks tend to underperform in a period of high interest rates.

Bitcoin’s price action has also mirrored the performance of American shares. On Monday, the Dow Jones declined by more than 200 points while the Nasdaq 100 index fell by 50 points. At the same time, the CBOE VIX index rose by more than 4%, signaling that investors are getting fearful. Further, the Bitcoin fear and greed index has moved to the extreme fear zone of 26.

The BTC/USD pair is also consolidating after receiving criticism about Bitcoin from Warren Buffett and Charlie Munger. When holding their meeting in Omaha, the Berkshire Hathaway leaders argued that Bitcoin was a non-yielding asset. At some point, Buffett announced that he would not buy all Bitcoins in the world for $25.

His statement is closely watched because of his influence in the market since he is one of the most successful investor of all time. Bitcoin also declined after Wikimedia announced that it will stop accepting Bitcoin and Ethereum donations.

BTC/USD Forecast

The BTC/USD pair has been in a tight range in the past few days. The pair is trading slightly below the resistance level at 39,000. It has moved slightly below the 50-day exponential moving averages (EMA) while the Stochastic Oscillator has moved below the oversold level. Other oscillators like the Relative Strength Index (RSI) has also tilted lower.

Notably, the pair has formed a head and shoulders pattern, signaling that it will likely have a bearish breakout. The pair will likely keep falling as bears target the neckline of the neckline at about 37,200.

The Bitcoin will likely remain in this tight range on Thursday. The key support and resistance levels will be at 40,000 and 44,000.

Bullish View

• Buy the BTC/USD pair and set a take-profit at 44,000.
• Add a stop-loss at 40,000.
• Timeline: 1 day.

Bearish View

• Set a sell-stop at 40,500 and a take-profit at 38,000.
• Add a stop-loss at 42,000.

The BTC/USD pair strong rebound eased on Wednesday evening and Thursday morning as Bitcoin diverged with American equities. The pair is trading at 41,352, which is slightly below the highest level this week. This price is also higher than the lowest level this week.

Bitcoin and Nasdaq 100 Correlation

The BTC/USD pair declined as the tech-heavy Nasdaq 100 index dropped by more than 100 points. The index declined as investors continued to worry about Netflix, one of the biggest media companies in the United States.

The company’s stock crashed by over 35% after it published weak quarterly results. It warned that it will have a difficult time experiencing growth in the coming years considering that competition has risen substantially recently. As a result, most tech companies like Spotify, Paramount, and Roblox tumbled by more than 10%.

In the past few months, the correlation between Bitcoin and other technology companies has emerged. This relationship has not been all that pronounced in other indices like Dow Jones and S&P 500 indices.

The BTC/USD pair has held steady this week as interest among big investors continue rising. For example, on Wednesday, Robinhood announced that it had acquired Ziglu, a UK company that offers cryptocurrency trading services.

A day earlier, Bloomberg reported that The Sandbox was raising $400 million at a $4 billion valuation. This fundraising will be one of the biggest this year. Other blockchain companies that have raised funds recently include Near Protocol and Ava Labs, the parent of Avalanche.

Still, macro factors have also affected the price of Bitcoin. For example, bond yields have jumped sharply as investors anticipate that the Federal Reserve will be aggressive when hiking interest rates.

BTC/USD Forecast

Bitcoin is still trading in a narrow range. It dropped to about 38,590 on Monday and then rose to a high of 42,256 as US stocks rose. It has moved slightly above the 25-day moving average while the MACD indicator has been in a strong upward trend. The current price is along the 50% Fibonacci retracement level.

Therefore, Bitcoin will likely remain in this tight range on Thursday. The key support and resistance levels will be at 40,000 and 44,000. A move below 40,000 will signal that there are still more sellers in the market. As a result, there is a likelihood that the price will retest 38,700 if this happens.

More downside will be confirmed if the price moves below the support level at 1.2980, which was the lowest level this month.

Bearish View

• Set a sell-stop at 1.2970 and a take-profit at 1.2900.
• Add a stop-loss at 1.3050.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 1.3020 and a take-profit at 1.3100.
• Add a stop-loss at 1.2950.

The GBP/USD pair is trading at an important support level as investors reflected on the strong warning by the IMF about the US economy. It is trading at 1.300, which is both an important support level and also the lowest it has been this year.

UK Economy Is at Risk

The IMF made headlines on Tuesday when it delivered the latest economic forecasts. The agency now expects that the global economy will grow by just 3.6% this year. That outlook was slightly lower than where inflation is currently. It blamed the situation on the ongoing crisis in Ukraine.

The GBP/USD pair moved sideways after it warned about the UK economy. According to the IMF, the UK faces the worst inflation shock among all major advanced economies in the coming two years.

It expects that the UK economic output will be about 1% smaller in 2022 and 2023 than its forecast in January. It pointed to the rising cost of living and slowing investments in the country. Notably, its 2023, it expects that the UK economy will grow more slowly than other G7 countries. However, it is worth noting that IMF forecasts are not always accurate.

The GBP/USD pair is also wavering after the US published strong housing starts and building permits data. The data revealed that building permits rose from 1.865 million to 1.873 million. In the same period, housing starts rose from 1.78 million to 1.79 million. These numbers shows that the housing sector in the United States is still strong.

The US will publish the latest existing-home sales data on Wednesday. Economists expect the data to show that existing home sales dropped from 6.02 million to 5.80 million in March. Still, these numbers will not have a major impact on the GBP/USD pair.

GBP/USD Forecast

The GBP/USD pair has been in a tight range in the past few days. It is hovering around the 1.300 support level. As a result, the pair is trading slightly below the 25-day moving average. It is also between the middle and lower lines of the Donchian channels while the MACD has moved below the neutral level.

Therefore, more downside will be confirmed if the price moves below the support level at 1.2980, which was the lowest level this month. If this happens, the next support level will be at 1.2900.

I still favor the downside but will obviously keep an eye on the natural gas and inflationary concerns in Europe.

The Euro Stoxx 50 futures markets were closed on Friday, but when looking at the chart overall, you can see that for the last week or so, we have been trading between the €3700 level on the bottom and the €3800 level on the top. Because of this, we are forming a bit of a rectangle, but at this point, I think it is only a matter of time before we have to make a decision for a bigger move.

It is worth noting that we are hanging around the 38.2% Fibonacci retracement level and had recently pulled back from the 50% Fibonacci retracement level. The 50-day EMA is sitting below the €3900 level and is drifting much lower. That shows just how strong the downtrend is, and it is worth noting that throughout the European Union, we have major issues economically. Not the least of which is going to be a potential disruption in energy.

If the energy situation in the European Union continues to be precarious, it is hard to imagine where the economy has an opportunity to go forward on a strong footing. The market will have to worry about these things, so I think it only makes a certain amount of sense that rallies will continue to see the 50-day EMA as a barrier.

The candlestick from Tuesday is a barrier to overcome. If we break down below the bottom of the candlestick, it is likely that we go looking to reach the €3600 level, possibly even down to the €3500 level. It would be a simple continuation of the overall downtrend, but I do not necessarily think it will be as brutal to the downside as it had been previously. After all, that was more or less a panic to the lower levels, and the stuff that we are worried about now is something that is already somewhat known. Because of this, it makes sense that we will fall further, but it will be a little bit more gradual. In fact, it is not until we break above the €3900 level that I would consider the market being able to go to the upside. At this point, I still favor the downside but will obviously keep an eye on the natural gas and inflationary concerns in Europe.

The pair will likely continue its consolidation phase today. The key support and resistance levels will be at 1.300 and 1.3200, respectively.

Bearish View

• Sell the GBP/USD and set a take-profit at 1.3050.
• Add a stop-loss at 1.3165.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 1.3130 and a take-profit at 1.3200.
• Add a stop-loss at 1.3050.

The GBP/USD pair remained in a tight range on Tuesday morning as investors continued to assess the impact of the ongoing war in Ukraine. It is trading at 1.3100, where it has been in he past few days. This price is about 1.5% below the highest point in mid-March.

Ukraine Crisis

The GBP/USD pair has been moving sideways in the past few days as investors assess the next options for the Bank of England (BOE) and the Federal Reserve.

Analysts agree that the two central banks are between a rock and a hard place. With the unemployment rate falling and inflation are rising, the two banks have decided to keep hiking interest rates. The BOE has already delivered three rate hikes while the Fed made its first hike in March.

The biggest concern is that the two economies will become more at risk if they become more aggressive. At the same time, there are concerns that failure to act could lead to a substantially higher inflation.

In his annual letter to shareholders, JP Morgan’s Chief Executive warned that there will be more volatility in the coming months. He recommended that the Fed should hold the course and deliver more rate hikes in a bid to slow inflation.

The GBP/USD is also moving sideways as investors focus on the ongoing crisis in Ukraine. The UK and US are both considering more sanctions on Russia after the country was accused of war crimes. As the escalation continues, we could see more inflation as the price of energy continue rising.

There will be no major data from the US and UK today. The only catalyst will be the latest services and composite PMI numbers by Markit and the Institute of Supply Management (ISM). Their impacts on the pair will be muted though.

GBP/USD Forecast

The GBP/USD pair has been in a tight range in the past few days. As a result, the pair is trading at the 25-day moving average. It has also moved between the middle and lower lines of the Donchian Channels while the Relative Strength Index (RSI) has moved below the neutral level at 50. The pair has also dropped below the 23.6% Fibonacci retracement level.

Therefore, the pair will likely continue its consolidation phase today. The key support and resistance levels will be at 1.300 and 1.3200, respectively.