Nov 22, 2024 (MENAFN via COMTEX) --
(MENAFN - Daily Forex)
The gains made yesterday by the GBP/USD currency pair to the resistance level of 1.2715 quickly evaporated. Concurrently, it returned to stabilizing around its six-month low, currently around the 1.2650 support level at the time of writing this analysis. This comes ahead of the announcement of a package of important US economic data and statements by some US Federal Reserve officials. Recently, weakening risk sentiment has deprived the pound sterling of its chance to rise.
Reasons for the Rise in the Pound Sterling
According to reliable trading platforms, the pound sterling has strengthened against other major currencies. This followed the announcement of economic data results, which showed that UK consumer price inflation rose to 2.3% year-on-year in October from 1.7% in September, a larger increase than the 2.2% expected by the market. At the same time, the UK monthly inflation rate rose to 0.6% in October, from being stable in the previous month. The crucial annual rate of services for the Consumer Price Index rose from 4.9% to 5.0%, signalling to the Bank of England that it should not rush to cut interest rates.
The reaction to the economic data results caused UK bond yields to rise, reflecting expectations that borrowing costs will remain higher for longer. Overall, the chances of a British interest rate cut next month have declined after the releases, in line with the rise in the pound sterling.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money Weakening Risk Sentiment Negatively Impacts Sterling
As is known, the pound is a risk currency and tensions between Russia and Ukraine have recently escalated amid measures that threaten to widen the scope and length of the war. This is in addition to the continued strength of the US dollar, driven by expectations for the future of the US economy under Trump's leadership of England Policy Expectations
Widely, markets are expecting no change in the Bank of England policy decisions next week, and expectations have increased based on Governor Andrew Bailey's testimony to the Treasury Select Committee this week. However, the BoE Governor is unsure how the £26 billion jobs tax announced in October will affect UK inflation. Recent economic data has also given the BoE Governor"reason to think". Consequently, next month is too early for another rate cut.
EURUSD Chart by TradingViewTechnical Analysis for the GBP/USD pair today:
According to the performance on the daily chart, the overall outlook for the GBP/USD currency pair remains bearish. However, dear follower of TradersUp, you should pay attention that the movement of the GBP/USD towards the support levels of 1.2600 and 1.2545 will push technical indicators towards strong oversold levels. From the last level, you can consider buying the GBP/USD. Furthermore, as we always recommend, do not take risks and activate take-profit and stop-loss orders to ensure the safety of your trading account from any sudden price reversals. Conversely, for the currency pair to exit the downward trend, the bulls must first move towards the resistance levels of 1.2775 and the psychological resistance of 1.3000, respectively.
Also, do not forget that the pound sterling was one of the best performing G10 currencies in 2024, due to the factors of economic growth surprises and the cautious approach to dealing with interest rates at the Bank of England.
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