Technical Analysis

GBP/USD Price Analysis – Aug 29, 2023

By LonghornFX Technical Analysis
Aug 29, 20232 min
Signal 2023 05 25 122627 002

Daily Price Outlook

The GBP/USD currency pair continued its upward trend for a second day, trading around 1.2620 on Tuesday in Asia. However, the reason for its upward rally can be attributed to the modest US Dollar downfall. This, along with hawkish remarks by Bank of England (BoE) Deputy Governor Ben Broadbent, underpins the British Pound and provides a modest lift to the GBP/USD currency pair.

China's Market Boost, Hawkish Comments, and GBP/USD Dynamics

It is worth noting that China's decision to lower stock trading charges aims to help its market and rebuild trust among investors. This has made the US Dollar weaker, following its recent strong performance. The British Pound is benefiting from hawkish comments by Bank of England's Deputy Governor Ben Broadbent, supporting the GBP/USD pair.

In the meantime, Broadbent's remarks at the Jackson Hole Symposium suggest a cautious approach to monetary policy due to ongoing price effects. Despite recession concerns, markets expect the BoE to raise rates less than initially thought, with limited further increases anticipated after September's expected hike.

Fed Chair Powell's Impact and Market Outlook

Moreover, Federal Reserve (Fed) Chair Jerome Powell solidified market expectations for one more rate hike this year. Powell mentioned on Friday that due to persistent inflation, the Fed could raise rates again while being cautious about tightening too much. This supports higher US Treasury bond yields and, alongside global economic concerns, could prevent significant USD declines and restrict additional gains for the GBP/USD pair.

Looking ahead, investors will stay attentive as they await relevant market-moving data on Monday, while UK banks remain closed for the Summer Bank Holiday. The GBP/USD pair's recent drop below the 100-day Simple Moving Average indicates a potential downward direction.

GBP/USD Price Chart – Source: Tradingview
GBP/USD Price Chart – Source: Tradingview

GBP/USD - Technical analysis

The GBP/USD pair has demonstrated a notable upward trajectory, now challenging the 1.2625 threshold. Its current posture above this level augments the prospects of further appreciation, laying the groundwork for an intraday bullish momentum. We anticipate a potential trajectory towards the 1.2725 region in the near future.

However, an inability to sustain above the 1.2625 mark might curb the anticipated rise, potentially reversing the trend to a decline.

Today's forecasted trading band is set between a support of 1.2560 and a resistance at 1.2725.



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