British pound (GBP) GBP/USD most recent Fresh Dollar Resilience directing the course

Market Analytics and Considerations

Key Points

• GBP/USD declines as the US dollar recovers before Central Bank consultations.
• Chancellor Hunt seeks to increase the attractiveness of the City of London.

Sterling is trading side by side with 1.2150 this morning, nearly two significant figures below Monday’s massive peak. The 200-day moving average is currently acting as support for cable, and the shorter, intermediate, and long-term moving averages are all rising, adding to the recent uptrend in the pair. A break below would bring the 1.2050 region into the spotlight.

Better-than-anticipated, US economic reports and increasing US bond yields have helped the US currency recover. The US ISM data this week and last Friday’s good NFP result have fueled hopes that the US economy is better than anticipated and that the Fed can be more accommodating and speed up interest rate increases if necessary. While the 2 UST trades around 4.35%, a one US Treasury now yields 4.77%.

The US dollar is moving higher thanks to a positive bond market environment after touching a new five-month low on Tuesday. The DXY is pushing up into resistance from a string of previous lows and highs, according to the technical setup, which shows it is trading along either side of the 200-day moving average.

Later this week, Jeremy Hunt, the UK Chancellor of the Exchequer, is anticipated to announce a number of reforms intended to increase the attractiveness of the City of London. According to various media sources, the new Chancellor wants to reduce ring-fencing restrictions on the UK’s biggest banks and modify Solvency II regulations to boost the competitiveness of the insurance industry.

A number of significant central banks will make their most recent monetary policy announcements the following week, just before the Christmas holiday. Next Wednesday, the Fed is predicted to raise rates by 50 basis points, and the Bank of England is predicted to follow suit the following day by raising rates by half a percentage point. As usual, it will be important to closely monitor the press conferences after decisions.

This morning, sterling is trading along either side of 1.2150, almost two significant figures below Monday’s mega peak. Cable is currently supported by the 200-day moving average, and the short and medium and medium-term moving averages are trending upward, contributing to the recent uptrend in the pair. The 1.2050 area would come into the equation with a break lower.

According to statistics from retail traders, 1.20 traders outnumber shorts by a margin of 45.39%. The number of traders who are net-long is up 3.12% from yesterday and down 7.90% from the previous week, whereas the number of traders who are net-short is down 1.48% from Tuesday and up 2.68% from the previous week.

Indication – Mixed Bias

Pivot Points Fibonacci (Daily)