- The pound bounces from 1.2020 and approaches 1.2055, session highs.
- The pair is almost flat in a quiet trading session.
- GBP/USD needs to recover to 1.2450 to confirm its long-term uptrend — SocGen.
The reversal of GBP since the intraday high of 1.2055 seen at the beginning of the European session it has been supported near 1.2020, and the pair rallied again to reach the 1.2040 area so far.
From a broader perspective, GBP/USD is largely unchanged on the daily chart, hovering within the lower 1.20 range after reversing from the 6-month high at 1.2450 seen last week.
The pound, looking for direction in a session of little trade
The pair lost momentum earlier in the month after the Bank of England slowed the pace of monetary tightening following its December meeting. The bank raised rates by 50 basis points, with two of the nine committee members voting to keep rates unchanged.
The BOE decision has fueled speculation of softer monetary tightening in 2023 and suggests that interest rates could peak at a lower level than previously estimated. Some market sources anticipate a maximum Bank Rate of 4% next year, instead of the 6% previously forecast.
Currency markets remain mostly flat in a post-Christmas week, with stock markets posting moderate gains, buoyed by the Chinese authorities’ announcement of the end of traveler entry restrictions, which is expected to trigger a sharp economic recovery in the Asian country.
GBP/USD needs to recover 1.2450 to confirm the long-term uptrend — SocGen
From a technical point of view, Société Générale analysts see the resistance at 1.2450 as a crucial element to confirm the longer-term uptrend: “The recent high at 1.2450 is expected to be intermittent resistance. hurdle, pullback phase may ensue (…) The recent pivot low at 1.1900 is short-term support. A break may lead to a deeper pullback towards the October high at 1.1640.”
Technical levels to watch
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.
