- Pound Sterling corrects lower from yearly highs against US Dollar
- GBP/USD remains a ‘buy-the-dips’ trade ahead of Fed and BoE meetings
- Technical indicators support Pound Sterling buyers
The Pound Sterling (GBP) has retreated from its yearly highs against the US Dollar (USD), pushing GBP/USD below 1.2900, marking its lowest level in over a week.
Pound Sterling Weakens Amid Risk Aversion
Despite a stable US Dollar, GBP/USD has continued its corrective move downwards. Diverging monetary policies between the US Federal Reserve (Fed) and the Bank of England (BoE) failed to lift the Pound Sterling, as concerns over China’s economic slowdown dampened market sentiment.
China’s recent interest rate cuts and lack of strong economic policies have added to the risk-off sentiment, impacting global markets. Additionally, disappointing earnings reports from tech giants have further weighed on market outlook.
While the USD faced selling pressure due to expectations of a Fed rate cut, strong US GDP data provided some support. However, concerns over softer inflation figures limited the Dollar’s gains.
Upcoming Events to Watch
All eyes are on the upcoming Fed and BoE policy meetings, which will determine the future direction of the Pound Sterling. Key economic releases and speeches from central bank officials will also impact market sentiment.
Technical Outlook for GBP/USD
Technical indicators suggest a potential uptrend for GBP/USD, with the RSI holding above 50. A break below the 21-day SMA could shift the bias bearish, while a move above the weekly high may signal a bullish continuation.
Analysis Breakdown
The Pound Sterling has pulled back from its yearly highs against the US Dollar due to concerns over China’s economy and diverging central bank policies. Market sentiment remains cautious ahead of key events like the Fed and BoE meetings, which will shape the future direction of GBP/USD. Technical indicators point to a possible uptrend, but key support and resistance levels will determine the pair’s next move. Stay tuned for more updates on this developing story.