Oct 15, 2022
VOT Research Desk
Another eventful week for the GBP/USD exchange rate occurred as questions over UK fiscal and monetary policy managed to keep GBP bulls afloat in the face of soaring US inflation and more aggressive Fed rate increase bets. Prior to reversing some of its weekly gain before the weekend, cable quickly rebounded from two-week lows of 1.0923 to close the week almost 400 pips higher.
Future attention will be focused on UK bond market activity and fiscal policy statements, which will eclipse the country’s inflation report.
GBP/USD was able to maintain its position above the 20-day SMA despite Friday’s fall. Furthermore, the daily chart’s Relative Strength Index (RSI) indicator dropped below 50, indicating that the pair has lost its bullish momentum and has switched to neutral in the near term.
The Fibonacci 23.6% retracement level of the most recent downturn, at 1.1050, serves as important support on the downside, followed by 1.1000 (a psychological level.
The (20-day SMA), and 1.0900. The Fibonacci retracement levels of 1.1300 (38.2%), 1.1460 (50%) and 1.1500 serve as resistance levels (psychological level, 50-day SMA).
The expert’s research predicts that GBP/USD will remain neutral the following week. The average objective is just over 1.0900, but the one-month forecast indicates a big bearish change.
