GBP/USD and EUR/GBP forecasts:
- A hawkish reassessment of interest rate expectations in the UK has boosted the economy. british pound in the last few weeks
- Sterling’s outlook remains constructive in the very short term
- This article will cover the important points GBP/USD and euro/poundTech levels to watch in the coming days and weeks
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The British pound has risen sharply against the top nations in recent weeks, helped by a hawkish hike in the Bank of England’s final interest rate amid rampant inflation in the UK. The UK CPI in May reached 8.7% year-on-year, the highest level among advanced economies, but this prompted the UK monetary authorities to take a more proactive stance, with the June meeting increased by 50 basis points to a surprising 5.0%.
Sustained strong inflationary pressures, combined with signs that this trend is taking hold, will likely push the Bank of England above 6.0% in the coming months, with rates likely to rise toward 2024, with market-indicated probabilities would probably reach a maximum of 6.50%. Financial institutions, led by Andrew Bailey, will also need to maintain a restrictive stance for the long term to prevent secondary effects on prices from spreading throughout the economy.
Meanwhile, the Fed and ECB will end their tightening campaigns soon, as inflation is expected to fall relatively quickly in the US and Eurozone than in the UK. Such a monetary policy divergence could favor the pound (GBP) in the short term, but if the UK economy were to bear the weight of the highest interest rates in years and slip into a recession, There may be headwinds.
Related: Trading GBP/USD – An Overview of the Pound Dollar Forex Pair
|
change |
long |
shorts |
OI |
| every day | 3% | 8% | 6% |
| every week | -twenty one% | 20% | 2% |
GBP/USD technical analysis
After the recent rally, GBP/USD is steadily approaching the upper bound of the rising wedge at 1.2975. With the market stretched and the RSI indicator in an overbought situation, cable may struggle to overcome this resistance, but should it break out, it will gather bullish momentum and then 1.3150 and 1.3290. may rush towards
Conversely, if sellers regain control and trigger a bearish reversal from the current levels, first support will emerge at 1.2840 followed by 1.2675. Further weakness could see a pullback towards 1.2600, just above the lower bound of the 50-day simple moving average and rising wedge.
GBP/USD Technical Chart
Creating a GBP/USD Chart Using TradingView
|
change |
long |
shorts |
OI |
| every day | 6% | -14% | 0% |
| every week | 1% | -6% | -1% |
EUR/GBP Technical Analysis
After Tuesday’s decline, EUR/GBP has fallen towards the critical floor area around the psychological 0.8500 level. If the bulls are unable to fend off the current attack on technical support and the price falls below this zone, then the sellers may get bold and launch an attack on 0.8435 followed by 0.8340.
In contrast, if the EUR/GBP regains its composure and manages to bounce back from current levels, the first resistance line to watch will lie just below the 0.8600 handle. A clearing of this ceiling on the high side could attract new buyers to the market and create the right conditions for a rally towards 0.8650.
