- The pound reverts from 157.75, contained in the 156.00 area.
- The British pound cuts losses after an upbeat UK budget report.
- GBP / USD remains biased to the upside, targeting 158.22 – DBS Bank.
The pound’s reversal from 157.75 witnessed on Tuesday could not be confirmed below the 155.90 / 00 support area, where the GBP / USD pair found support to bounce off Wednesday’s US trading hour and return to the 156.45 zone.
The pound sterling appreciates thanks to optimistic budget forecasts
The pound has ignored on Wednesday, cutting losses against its main rivals in the wake of positive economic forecasts released by British Finance Minister Rishi Sunak in the autumn 2021 budget report.
Sunak assured that the British economy will expand at a 6.5% rate in 2021, beating previous forecasts of a 4.0% growth forecasted at the time when the COVID-19 lockdowns were still active. Beyond that, the Office of Budget Responsibility (OBR) expects the deficit for the financial year to shrink to 7.9% of GDP, disappointing initial estimates of 10.3%.
GBP / JPY expected to resume bullish trend, targeting 158.22 – DBS Bank
From a broader point of view, according to Benjamin Wong, a strategist at DBS Bank, he expects the pair to resume its uptrend from the lows in late July: “A quick look at the daily Ichimoku charts shows that the bullish momentum remains at a feverish tone, and there is no claim that the highs of 158.22 are a verified absolute high. Therefore, we remain open to the possibility that the crossover will attack higher levels before the current bull run is terminally terminated. produced at 148.47, the July 2021 lows. “