GBP/USD Trades Near Two-Year Peak Despite Minor Losses
- Current Exchange Rate: GBP/USD trades at 1.3403, down 0.08%
- Key Levels: A break above 1.3437 could target 1.3450 and 1.3500, while a drop below 1.3312 may lead to further declines
The Pound Sterling experienced slight losses against the US Dollar but remains near its two-year peak levels, showcasing strength in the currency market. The US Bureau of Economic Analysis recently announced that inflation is on track to meet the Federal Reserve’s 2% target. As of the latest update, the GBP/USD pair is trading at 1.3403, showing a marginal decline of 0.08%.
GBP/USD Price Forecast: Technical Outlook
Despite the positive momentum, the GBP/USD trend has shown signs of slowing down as it failed to reach a new record high in 2024.
As the price continues to move upward, the momentum has weakened. The Relative Strength Index (RSI) is declining while the spot prices are still aiming higher, indicating a potential negative divergence. However, for this divergence to materialize, sellers need to push the prices below the top trendline of the ascending channel.
If the GBP/USD pair extends its gains above the March 1, 2022 peak of 1.3437, the next resistance levels to watch for are 1.3450 and 1.3500.
On the other hand, a drop below the September 25 and 26 low of 1.3312 could lead to further downward movement. The next support levels to monitor would be the September 23 low at 1.3248, followed by the psychological level of 1.3200.
GBP/USD Price Action – Daily Chart
Pound Sterling FAQs
- Oldest Currency: The Pound Sterling (GBP) is the oldest currency in the world, with a history dating back to 886 AD.
- Key Trading Pairs: GBP/USD (Cable), GBP/JPY (Dragon), and EUR/GBP are the primary trading pairs involving the Pound Sterling.
- Monetary Policy Impact: The Bank of England’s decisions on interest rates significantly influence the value of the Pound Sterling.
- Economic Indicators: Data releases such as GDP, PMIs, and employment figures can impact the direction of the GBP.
- Trade Balance: The trade balance, measuring exports and imports, also plays a crucial role in determining the strength of the Pound Sterling.
Overall, the Pound Sterling’s value is influenced by a combination of historical significance, monetary policy decisions, economic indicators, and trade balance dynamics. Understanding these factors can provide insights into the currency’s performance and potential future movements.