GBP/USD bears are pausing around 1. 2180 early Friday in Asia, after the biggest daily drop in a month and a half, as sterling investors await key UK data. Do not please the bulls despite the announcement of an interest rate increase. It should be noted that the global warmongering movements of major central banks have allowed the US dollar to regain upward momentum and exerted downward pressure on the quote.
The Bank of England (BOE) raised the policy rate through 50 base issues (bps) to 3. 5% as expected, but it may please GBP/USD buyers.
On the other hand, statements like “Most OAG judges that additional increases in the rate of reduction would possibly be necessary” attracted attention and drowned out cable costs thereafter. The style of the Monetary Policy Committee (MPC) has also reinforced the bearish bias. . Voting trend as two of the nine OAG members voted against the rate increase.
It should be noted that the “old lady”, the casual call of the Bank of England, thanked the new autumn of the government and reported fewer rate increases, which also weighed on GBP/USD prices.
In addition to moderate BOE rate hikes and pessimistic economic projections, looming fears of a UK recession also drew attention after policymakers expressed fears of rising energy expenditures and a climate without bloodshed. Along the same lines, there may be labor movements nearby. It should be noted that the political nervousness surrounding Brexit is an additional burden on GBP/USD prices.
Although the BOE announced a moderate increase, the old lady decided to join the US Federal Reserve. The US (Fed), the Swiss National Bank (SNB) and the European Central Bank (ECB) in proposing a rate increase of 0. 50%. Major central banks have cushioned the volume of interest rate increases, all showing willingness to keep rates higher longer, which in turn has allayed inflation fears and highlighted recession problems. As a result, investors rushed to look for the US dollar. protection against threats and the same weighed on GBP/USD prices.
In doing so, the U. S. dollar is in the U. S. dollar. The U. S. government paid little attention to the most commonly pessimistic knowledge in the country. That said, U. S. retail sales are not in the U. S. The U. S. recorded a figure of -0. 6% m/m in November compared with 0. 1% expected and 1. 3% previously, while the main points of the Philadelphia Fed/New York Fed production survey were disappointing for the month in question. In addition, commercial production slowed in November and jobless insurance claims also fell during the week ending Dec. 9.
After witnessing the BOE’s decline, GBP/USD investors will pay attention to UK retail sales, the key to Britain’s gross domestic product (GDP), as the first readings of the December purchasing managers’ indices (PMI) of S
Forecasts suggest that UK retail sales may reach -5. 6% y/y from -6. 1% previously, while non-fuel retail sales may reach -5. 8% y/y from -6. 7% of previous readings. In addition, the production PMI S
Thus, forecast knowledge paints a combined picture for GBP/USD prices, but Bank of England-inspired pessimism (BOE) may remain depressed in sterling.
Closing under a six-week uptrend line, GBP/USD showed a bearish ascending bezel chart formation and suggests a further decline. 14
Although the theoretical confirmation goal of the rising bezel is to guide the pound towards the October low near 1. 0925, the 200 DMA and 50 DMA, around 1. 2100 and 1. 1730, respectively, may be offering intermediate stops in the expected race to the south.
The mental magnet at 1. 2000 and the July low near 1. 1760 are also likely to act as intermediate prevention for cable.
Alternatively, sterling’s rally remains elusive unless the price challenges the development of the currency’s expansion, emerging above the resistance line near 1. 2355.
Even so, the 61. 8% Fibonacci retracement point of the January-September fall of the GBP/USD pair, around 1. 2450, will precede the upper line of the indicated corner, near 1. 2610, to challenge the bulls.
Overall, GBP/USD is in bearish territory, but 200-DMA can offer quick support.
Trend: expected decline
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