The Pound Sterling surged against the US Dollar as recent economic data raised expectations of quicker interest rate cuts by the US Federal Reserve. GBP/USD is currently trading at 1.2833, bouncing back from a daily low of 1.2707.
The weakening US Dollar comes as the July ISM Manufacturing PMI hit its lowest level since December 2023 and Nonfarm Payrolls missed expectations. Traders are now pricing in a larger rate cut at the upcoming September meeting, boosting the Pound’s strength.
GBP/USD Technical Analysis: Key Levels to Watch
After a downward trend earlier in the week, GBP/USD has reclaimed important resistance levels, such as the 50-day moving average at 1.2787 and the psychological 1.2800 mark. The Relative Strength Index (RSI) has turned bullish, indicating a shift in momentum favoring buyers.
If GBP/USD closes above 1.2800, it could target the June 12 high at 1.2860, followed by levels at 1.2900 and 1.2950. On the other hand, a drop below 1.2800 may lead to a trading range between 1.2800 and 1.2700, with support at the 100-day moving average of 1.2683.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world, dating back to 886 AD, and is the official currency of the United Kingdom. It is the fourth most traded currency globally, with key pairs like GBP/USD and GBP/JPY. The value of the Pound is influenced by factors such as monetary policy, economic data releases, and trade balance indicators.
Analysis:
The GBP/USD pair has seen a strong rally above the 1.2800 mark, driven by speculation of faster US rate cuts. Traders are closely watching key resistance levels and technical indicators for potential price movements. Understanding the impact of economic data and central bank decisions on currency pairs like GBP/USD can help individuals make informed decisions about their finances and investments.