Daily Price Outlook
In European trade on Friday, the British pound climbed for the third straight session versus the US dollar, reaching a year high above $1.26. The robustness of the UK banking sector, which is deemed more resilient than that of Europe and the US, is ascribed to the sterling's rise.
Meanwhile, the US dollar fell further as a result of the country's deepening banking crisis, with traders anticipating potential rate cuts later this year that could push the economy into recession.
Sterling is now the best performing major currency in the G8 group this year, owing to strong UK economic data and the banking sector's strength. UK banks were able to weather recent challenges in the banking sector in Europe and the United States.
Andrew Bailey, Governor of the Bank of England, stated that there is no threat to the UK's financial stability because the country's banks are highly flexible and capitalised. Furthermore, higher UK interest rates bolstered the pound's strength, with more rate hikes expected in the future.
The dollar index, on the other hand, lost 0.3% on Friday, resuming losses and reaching nearly 13-month lows against a basket of major rivals. The US banking sector continues to pose hazards to the dollar, potentially leading to a recession in the US economy.
This week, significant losses were reported by US regional banks such as PacWest, First Horizon, and Western Alliance, prompting Western Alliance to consider selling assets in order to overcome the ongoing financial crisis.
Daily Technical Levels
Pivot Point: 2054
GBP/USD – Technical Outlook
Since yesterday, the GBP/USD pair has been lingering around the 1.2600 level, with new attempts to break it, bolstering the projected positive trend in the coming time, with the next objective at 1.2650.
Surpassing this level will pave the path for additional gains toward the 1.2810 area. The 50-day exponential moving average is supporting the bullish wave, which is organized by bullish channels.
Breaking 1.2520, on the other hand, will halt the expected rise and send the price into a new bearish correction, with a potential target of 1.2400 areas before any new attempt to resume the main bullish trend. Today's predicted trading range is between the 1.2520 support level and the 1.2680 resistance level.
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