Daily Price Outlook
The GBP/USD currency pair has failed to stop its previous declines and is still flashing red around the $1.1810 mark amidst ongoing Brexit uncertainties and chatter from the Federal Reserve regarding future monetary policy.
At present, the GBP/USD currency pair is trading within a relatively tight range of 1.1810 to 1.1842, with the current price at 1.1831, indicating a lack of decisive market movements. Ongoing Brexit uncertainties and mixed signals from the US Federal Reserve may be contributing to this trend.
Brexit has been a major driver of the GBP/USD pair's poor performance, as investors remain concerned about the UK's future relationship with the European Union. The lack of progress on these issues has resulted in GBP losses and affected the pair's overall performance.
Additionally, the Bank of England's monetary policy stance has played a role in the GBP/USD pair's performance. The central bank has been under pressure to support the UK economy during the COVID-19 pandemic and has implemented a range of monetary policy tools, such as interest rate cuts and asset purchases.
Feds Hawkish Stance & Bullish US Dollar
Recently, the US Federal Reserve has taken a hawkish tone, suggesting that interest rates may be raised sooner than originally anticipated. This has led to a stronger US dollar, as traders anticipate tighter monetary policy in the future, reinforced by positive economic indicators such as lower unemployment and increasing inflation.
The bullish US dollar has an impact on other currencies, including the GBP/USD pair, as traders adjust their strategies in response to changing market conditions. This hawkish approach and strong US currency suggest the possibility of a shift in the global economic environment in the coming months.
On Wednesday, the US dollar strengthened against a basket of currencies, reaching its highest level in three months. The dollar index and dollar index futures both rose by 0.2%, hitting their best levels since early December. The reasons for the dollar's rise are not entirely clear, but it may be due to global economic uncertainty and market volatility, as well as the Federal Reserve's hawkish tone and the strength of the US economy.
GBP/USD Price Chart - Source: Tradingview
GBP/USD Intraday Technical Levels
Pivot Point: 1.2023
GBP/USD – Technical Outlook
The GBPUSD pair has strongly broken the 1.1940 level and is currently hovering around the 1.1800 level, indicating a return to the bearish correctional track. Further expected declines are likely on an intraday and short-term basis, with our next target at 1.1625.
As such, we anticipate continued bearish trend dominance in the upcoming trading sessions, bolstered by the negative pressure from the EMA50. However, there may be some temporary sideways fluctuation due to the current positivity of stochastic before the expected decline resumes.
It should be noted that breaking through the 1.1940 level would halt the current negative pressure and initiate new recovery attempts. Today's projected trading range is between 1.1720 support and 1.1890 resistance.
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