- According to the recent performance, the price of the GBP/USD currency pair is still looking for a strong stimulus to complete the recent upward retracement, which affected the 1.2210 resistance level.
- It settled around 1.2170 at the time of writing the analysis, waiting for anything new.
- The British throughout the year 2023 negatively affects any sterling gains.
However, there are some analysts who believe that the pound may be on its way to recording more gains after a strong turnaround in the last hours. The pound fell to its lowest level below 1.19 on Friday, before jumping again above the key level of $1.20 after the release of some US data. The surprise indicated that growth in the largest economy in the world began to slow down significantly.
Commenting on this, Ricardo Evangelista, Senior Analyst at ActivTrades says: “The US dollar started the week in full swing, as it lost ground against other major currencies and approached its lowest levels in December. And investors are starting to price in a less aggressive stance from the Federal Reserve, after the jobs numbers were announced last Friday.”
According to trading, the exchange rate of the British pound against the dollar (GBP / USD) fell to 1.1840 on Friday, before rising and closing the day at 1.2090, as it launched a broader global rally in the stock market. The continued positive investor sentiment means that the pair was able to extend the advance to 1.2188 on Jan 9 and further advance over the coming days could depend on continued supportive background music.
US labor market statistics showed a continued trend towards smaller increases in the number of jobs created by the economy, while a marked slowdown in hourly earnings growth was also recorded. Accordingly, the consensus is that when the US Federal Reserve meets next in February, it will decide to raise the US interest rate by 25 basis points, instead of 50 or 75 basis points at each of the past six meetings.
Therefore, there is an unforeseen situation where bad news about the economy is good news for the markets. This is considered a bearish scenario for the US dollar, especially given the improvement in risk appetite, following the reopening of China, which has also weakened the safe-haven appeal of the US dollar. According to some analysts, for GBP/USD a close above 1.21 will look bullish in the short term and will pave the way for a rise to around 1.225. And if this is exceeded for any reason, the next target will be the last intermediate high at 1.242.
GBP/USD Forecast:
Despite the comments above and the vision of some analysts, I still see GBP/USD selling from every ascending level, as the foundations of the stronger and continuous US dollar strength. In return, the pressure on the British pound is strong and continuous as well.
The nearest resistance levels for the bulls' recent move are 1.2220 and 1.2310, respectively. On the other hand, according to the performance on the daily chart below, the breach of the 1.2000 psychological support level will be important for the bears to control the trend again.
Today's economic calendar is devoid of important and influential economic releases, and accordingly, investor sentiment will have a strong impact on the performance of the currency pair.
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