The Fed calmed hawkish bets and BoE is up next

GBP/USD => The pair falls below 1.26
Wayfair => The stock trades 17% higher this week
Oil => The commodity rises towards $110

GBP/USD pares Fed inspired gains ahead of the BoE

GBP/USD rose 1% in the previous session after the Fed hiked interest rates by 50 basis points, as expected, and started a quantitative tightening program.

However, the Fed Chair Powell pointed to a less aggressive approach to monetary policy tightening going forward, removing the prospect of a 75 basis point hike in the coming meeting, that 50 basis points are likely.

Today the pair is fall, and it is the turn of the BoE. The UK central bank is expected to raise interest rates by 25 basis points in the fourth straight meeting of hikes. The pound will be watching to see if there are any dissenters in the vote and the central bank’s outlook amid growing fears that the UK could be heading for a recession if the BoE continues to raise rates. 

U.S. jobless claims Expected: 182k (2k) Previous: 180k

Where next for the GBP/USD price?

GBPUSD fell to a low of 1.2411 last week, a level not seen for two years; the move pushed the RSI into oversold territory and can now be considered the immediate support. The daily chart remains bearish.

While yesterday’s mover higher pushed the price over the 10 sma at 1.2590, today it has been slipped back below the level. Sellers need to break below 1.2410 to continue the bearish trend towards 1.2360, the two-year low. Buyers will look to rise above 1.2635, yesterday’s high, ahead of 1.27, the April 25 low.

Wayfair Q1 earnings preview

Wayfair is due to report Q1 earnings today, and they come as the stock already trades over 16% higher so far this week, although it remains down 37% over the last three months.

Today’s results are expected to show that Q1 has been a period of deteriorating performance as online sales slow after the pandemic. Rising inflation and consumer spending on travel and entertainment again are headwinds for the sector.

Wall Street expects sales of $2.998 billion, down from $3.478 billion last year. The home retailer is also likely to report a loss of $1.56 per share after posting a profit of $1.00 last year. 

Oil looks to OPEC+

Oil rose 5% yesterday after the EU unveiled a proposal to phase out Russian crude over the coming six months.

However, Hungary said it would reject the deal unless it were exempt from the deal amid fears over its energy security. While the agreement is by no means signed and sealed, the fact that the EU is prepared to move towards a Russian oil embargo is unnerving the market.

Today’s attention is on OPEC+, which will meet to decide the output for the coming month. OPEC+ is not expected to deviate from its previously agreed modest increase in production. Even if it did agree to produce more, the group has consistently failed to reach its output targets.

Given the tight supply, picture oil prices will likely remain supported at over $100. 

Support can be found at 103.75 (50 sma) and 100.00 (psychological level).

Resistance for the stock can be seen at 109.73 (April high) and 116.00 (March 24 high).

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