Pound Sterling breaks to new 2023 highs as it changes the head on notes and coins GBPUSD Technical Analysis Fundamental Analysis
in the US may have peaked unlike in the UK where persistently high inflation coupled with robust data continues to suggest the Bank of England will need to do more to get inflation under control. Since global investors are always looking to park their money where it can earn the highest return, this favors GBP.
Next Thursday’s Bank of England monetary policy meeting may reveal the BoE’s intent regarding future policy trajectory and could cause volatility in Pound Sterling pairs. If the BoE is particularly hawkish it will highlight this divergence with the Fed and result in increased flows to Pound Sterling. of the Conservative government in local elections suggests a high chance the party will lose the next general election.
The US Dollar, nevertheless, gained a short-lived boost after the release of Nonfarm Payrolls on Friday which showed a higher-than-expected rise of 253K versus 179K forecast. Above-forecast gains in Average Hourly Earnings of 4.4% and a fall in the Unemployment Rate to 3.4% further supported the Greenback.
To the upside, key resistance levels lie close to the current market level at the May 2022 highs at 1.2665, then at the 100-week Simple Moving Average situated at 1.2713, and finally at the 61.8% Fibonacci retracement of the 2021-22 bear market, at 1.2758. All provide potential upside targets for the pair. Each level will need to be decisively breached to open the door to further upside.
When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.Information on these pages contains forward-looking statements that involve risks and uncertainties.
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