- GBP/USD collects strength to almost 1.3555 in an early European session.
- A positive sight of a couple prevails over the key 100-day EMA with a stubborn RSI indicator.
- Immediate resistance appears at 1.3650; The first level of support to watch is 1.3415.
The GBP/USD pair gains adhesion to about 1.3555 during the early European session on Monday, strengthened by a weaker American dollar (USD). Trade uncertainty suppresses sentiments among American companies, which prompts traders to re -assess the status of secure stock exchange and act as a wind for the main couple. Traders are waiting for employment data in Great Britain on a fresh impulse, which is expected to seem later on Tuesday.
Technically constructive GBP/USD perspectives remains in place, because the main pair is well supported above the key 100-day interpretation medium movable (EMA) on the daily chart. Momentum up is strengthened by a relative force indicator (RSI), which stands above the central line near 60.50, showing a stubborn shoot in the near future.
On the other hand, the first barrier upside down appears at 1.3650, the upper border of the Bollinger band. The decisive break above this level can boost the rush and strive for 1.3748, the highest level on January 13, 2022. Further north, the next level of resistance is apparent at 1.3834, the highest on October 20, 2021.
In the case of a bear, the lowest of 29 May at 1.3415 acts as an initial level of support for GBP/USD. Violation of this level can drag the main pair in the direction of 1.3250, the lower border of the Bollinger band. An additional relegation filter for viewing is 1.3110, 100-day EMA.
Daily GBP/USD chart
Pound sterling faq
The Sterling (GBP) pound is the oldest currency in the world (886 ne) and the official currency of Great Britain. According to data 2022, this is the fourth most rotating currency exchange unit (FX), which is 12% of all transactions, an average of $ 630 billion a day. Key commercial pairs are GBP/USD, also known as a “cable”, which is 11%FX, GBP/JPy or “Dragon”, as is known by traders (3%) and EUR/GBP (2%). The Sterling pound is published by Bank of England (Boe).
One most crucial factor affecting the value of the pound of Szterling is the monetary policy undertaken by Bank of England. Boe bases his decisions whether he has achieved his main goal of “price stability” – a constant inflation rate of about 2%. Its main tool to achieve this is to adjust the interest rates. When the inflation is too high, Boe will try to restore it, raising interest rates, which makes him more costly for people and companies. This is generally positive for GBP, because higher interest rates make Great Britain a more attractive place for global investors to park their money. When inflation falls too low, it is a sign that economic growth slows down. In this scenario, Boe will consider reducing interest rates to a low-cost loan so that companies borrow more to invest in projects generating growth.
The data release the health of the economy and can affect the value of the pound of Szterling. Indicators such as GDP, PMI production and services and employment can affect the direction of GBP. A mighty economy is good for sterling. It not only attracts more foreign investment, but can encourage Boe to set interest rates, which will directly strengthen GBP. Otherwise, if economic data is feeble, the pound of sterling will probably fall.
Another significant issue of data for a pound of Szterling is a commercial balance. This indicator measures the difference between what the country earns on exports and what spends on imports in a given period. If the country produces a highly wanted export, its currency will benefit only from additional demand created by foreign buyers trying to buy these goods. Therefore, a positive net trade balance strengthens currency and vice versa for a negative balance.
