Abstract:GBP/USD dances on support
The pound has come under heavy pressure recently, particularly against the dollar which has been performing well against the broader market.
While the BoE is poised to continue its run of a rate hikes at every meeting, making it one of the more hawkish central banks, the moves in the pound are also a reflection of the challenges facing the UK economy, which the central bank believes is heading for double-digit inflation and a recession.
The pair struggled to capitalize on its recent strong rebound from a two-year low touched last week and faced rejection near the 1.2500 psychological mark on Wednesday. The early downtick was sponsored by the emergence of some US dollar dip-buying, bolstered by expectations for a more aggressive policy tightening by the US central bank.
The volatile price actions have resulted in a mixed outlook, as market expectations were for the overbought rally in GBP to extend over the 1.2500 mark, but that was incorrect as it staged a surprisingly sharp sell-off to a low of 1.23300, which counted as strong support. Currently, the price is trading at 1.23400, and the difficultexternal environment would favor a break of 1.23300 support in a move back to the 1.22 lows and eventually to the 1.21550 yearly lows.
Disclaimer:
The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.
We are pleased to announce that STARTRADER will launch new products on April 22nd, 2024 to provide clients with a broader portfolio of products.
Please be advised that the following instruments' trading hours and market session times will be affected by the upcoming April holidays.
Please be advised that the following CFD instruments will be automatically rolled over as per the dates in the table below. As there can be a pricing difference between old and new futures contracts, we recommend clients to monitor their positions closely and manage positions accordingly.
Please be advised that the following instruments' trading hours and market session times will be affected by the upcoming April holidays.