- The GBP/USD can find resistance in 1,3770, the highest level since October 2021.
- A rupture above level 70 would indicate overstrust conditions, suggesting a possible downward correction.
- The main support seems to be in the 9 -day EMA of 1,3635.
The GBP/USD pair goes back its recent losses from the previous session, quoting around 1,3730 during the Asian hours of Monday. The bullish bias persists since the technical analysis of the daily graph indicates that the torque moves up into the pattern of ascending channel.
The 14 -day relative force (RSI) index remains slightly below level 70, strengthening the bullish bias. However, a rupture above level 70 would indicate an overcompra situation and a low correction soon. In addition, the GBP/USD torque rises above the 9 -day exponential (EMA) mobile average, suggesting that the impulse of the short -term price is stronger.
On the positive side, the GBP/USD torque is prepared to test 1,3770, the highest level since October 2021, which was recorded on June 26, aligned with the upper limit of the ascending channel. A successful rupture above this crucial resistance zone could reinforce the bullish bias and support the torque to approach the psychological level of 1,3800.
The GBP/USD torque could find the initial support in the 9 -day EMA of 1,3634. A rupture below this level could weaken the impulse of the short -term price and exert down pressure on the torque to test the lower limit of the upward channel around 1,3460, followed by the 50 -day EMA in 1,3426. Additional falls could open the doors for the PAR to sail in the region around the minimum of two months in 1,3139, registered on May 12.
GBP/USD: Daily graphic
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.
