GBPUSD Bulls will keep their pressure and aim for 1.2700 and higher
The British Pound remains strong versus the US Dollar, with GBPUSD comfortably trading over the 1.2600 mark. After reaching a high of 1.2644 on Monday. Its best level since late August. On the one hand, hawkish statements from Bank of England (BoE) officials aided the GBP. The US Dollar, on the other hand, is under pressure amid anticipation. That the Federal Reserve (Fed) is done raising interest rates and may soon intervene opposite way.
The British Pound was boosted by stubbornly hawkish Bank of England officials.
On Monday, Bank of England Governor Andrew Bailey stated. That reducing inflation down to the 2% objective will be difficult. The central bank raised rates to 5.25% between 2022 and 2023. And while Bailey recognizes the negative impact higher rates have on people, he believes it is too early to consider rate reduction.
The Consumer Price Index (CPI) in the United Kingdom (UK) stood at 4.6% year on year in October, more than twice the central bank’s comfort level. Finally, officials anticipate that inflation will recover to 2% by the end of 2025.
On Tuesday, Deputy Governor Dave Ramsden of the Bank of England stated that UK inflation is mostly self-inflicted and that monetary policy must be restrictive in order to combat it. an extended period of time. He also stated that, while the local economy has been more resilient than projected during 2023, monetary policy will have a negative impact on growth.
This week’s UK macroeconomic calendar is relatively low on data. The country released the October BRC Shop Price Index, which came in at 4.3% year on year, up from 5.2% the previous month.
GBPUSD Technical Outlook
GBPUSD is up for the fourth day in a row, extending its bullish streak. It is trading a few pips below the aforementioned multi-month high, and the daily chart shows that it is continuing to move away from all of its moving averages.
The 20 Simple Moving Average (SMA) is heading north, well below the lengthier ones, indicating strong buying demand. In the case of technical indicators, Meanwhile, have lost some of their bullish momentum, as GBPUSD remains below the weekly high but develops around overbought levels, falling short of indicating an impending decline.
GBPUSD is neutral-to-bullish in the short term, according to the 4-hour chart. The pair is far above all of its moving averages. With the 20 SMA speeding north considerably ahead of the lengthier ones. Technical indications, on the other hand, lack directional strength. Albeit being bullish, in line with another move north on a breach over 1.2645.
Support levels : 1.2605 1.2570 1.2525
Resistance levels : 1.2645, 1.2690, 1.2730.
