- The GBP/USD struggles to capitalize on the profits recorded in the last two days in the middle of a modest strength of the USD.
- The optimism about commercial conversations between the US and China revives the demand of USD in the midst of a reposition before FOMC.
- Bassists need to expect a sustained breakdown below the EMA of 100 periods in the 4 -hour graph before making new bets.
The GBP/USD torque attracts some vendors during the Asian session on Wednesday and returns part of its weekly profits recorded in the last two days, to the level of 1,3400. The intradication fall is sponsored by a modest fortress of the US dollar (USD) and drags the countertop below the middle zone of 1,3300 in the last hour.
From a technical perspective, the GBP/USD torque showed at the beginning of this week some resistance near the support of 1,3250-1.3245 and bounced in the exponential mobile average (SMA) of 100 periods in the 4-hour graph. In addition, the oscillators in the daily/hour graphics remain in positive territory. This, in turn, suggests that any subsequent fall could be seen as a purchase opportunity near the round 1,3300 figure and remain limited.
However, a convincing rupture below the key support of 1,3250-1.3245 could make the GBP/USD torque vulnerable and prepare the stage for a significant corrective fall from the neighborhood of 1,3400, or the highest level since February 2022, reached last month. Cash prices could then accelerate the fall towards the level of 1,3200 en route to the support of 1,3170-1.3165 before eventually falling to the round level of 1,3100.
On the other hand, an impulse beyond the level of 1,3400 could face some resistance near the 1,3445 region, or the peak of several years. A sustained strength will be seen as a new trigger for the bullies and will allow the GBP/USD to recover the psychological level of 1,3500. The subsequent upward movement has the potential to raise cash prices to the region of 1,3570-1.3575 on a route to the round level of 1,3600.
4 hours of the GBP/USD
LIBRA ESTERLINA FAQS
The sterling pound (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most commercialized currency exchange unit (FX) in the world, representing 12% of all transactions, with an average of $ 630 billion a day, according to data from 2022. Its key commercial peers are GBP/USD, which represents 11% of FX, GBP/JPY (3%) and EUR/GBP (2%). The sterling pound is issued by the Bank of England (BOE).
The most important factor that influences the value of sterling pound is the monetary policy decided by the Bank of England. The Bank of England bases its decisions itself has achieved its main objective of “price stability”: a constant inflation rate of around 2%. Its main tool to achieve this is the adjustment of interest rates. When inflation is too high, the Bank of England will try to control it by raising interest rates, which makes access to credit for people and companies more expensive. This is generally positive for sterling pound, since higher interest rates make the United Kingdom a more attractive place for global investors to invest their money. When inflation falls too much it is a sign that economic growth is slowing down. In this scenario, the Bank of England will consider lowering interest rates to reduce credit, so that companies will borrow more to invest in projects that generate growth.
Published data measure the health of the economy and can affect the value of sterling pound. Indicators such as GDP, manufacturing and services PMI and employment can influence the direction of the sterling pound.
Another important fact that is published and affects the pound sterling is the commercial balance. This indicator measures the difference between what a country earns with its exports and what you spend on imports during a given period. If a country produces highly demanded export products, its currency will benefit exclusively from the additional demand created by foreign buyers seeking to buy those goods. Therefore, a positive net trade balance strengthens a currency and vice versa in the case of a negative balance
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
