GBPUSD Forecast – How to Profit From a Sideways Market
Despite being down about 15% year-to-date, the GBP/USD is still trading within a tight channel at around 1.2200. This price level is important because it marks a major support level from which the price may drop back to. However, the outlook for
financial institutions is expected to drive the price higher in the coming months, and the GBP/USD is likely to top out around 1.15 by the end of July.
Lorem ipsum doTypically, sideways markets are associated with periods of consolidation in which price moves between strong levels of support and resistance. This can be tricky to trade, and requires traders to carefully monitor trades to make sure they are correctly executed.
The GBPUSD is currently trading sideways in a narrow channel at around 1.2200. The pair is supported by the EMA50 and stochastic. The pair has been in a bearish trend since April 22nd, but is finally showing signs of a bullish rebound.
The Bank of England is expected to meet on November 3rd, and may announce an interest rate hike. The BOE has recently entered the bond market, and hopes to spur the economy with stimulus measures. However, the bank has admitted that it is still uncertain about the path of economic growth.
On the other hand, the Swiss National Bank recently announced continued intervention in the foreign exchange markets. The bank expects the economy to expand over the next two years. Currently, the bank is keeping rates at -0.75%, and may keep them there for the foreseeable future.
The CME Group Volatility Index is an indicator of forward-looking risk expectations on the GBP/USD. This robust measure measures 30-day implied volatility on GBP/USD futures.
The FTSE 100 Index rose 0.7 percent on Tuesday. However, the 10-year US Treasury bond yield declined. While this may be good news for the dollar, it does not bode well for the British pound.lor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.
Price will be driven higher by outlooks in financial institutions
Considering the state of the union, the Gbpusd price has a tendency to ebb and flow. The aforementioned recession may be in full swing but it is unlikely the Gbpusd price will resemble its pre-recession highs for the foreseeable future. Indeed, it has been said that the UK is the only major economy to not see a recession in the last decade. On the flipside, a resurgent economy is a good time for those that have the foresight to steer clear of the booby traps. The best way to achieve this is to maintain a well diversified portfolio by diversifying in the right sectors and markets. The big question remains, how to go about this? If you can answer it with clarity and a whack of the ol'd bourbon, you will be in a much better position to capitalize on the opportunity.
The Gbpusd price is no doubt the mainstay of your trades and etsy stomping grounds but it does have some notable drawbacks in the form of regulatory uncertainty and an unrelenting trade deficit.
GBP/USD is down over 15% year-to-date
Investing in the British pound has become increasingly difficult this year. The pound has declined in value, dropping to record lows against the US dollar. As the economy continues to suffer, the pound is vulnerable to an unfavourable trend.
The UK economy is still facing many macroeconomic headwinds. It is also experiencing high inflation and a recession, which is driving the pound's value down. The economy's fiscal policy response is crucial to GBP/USD's long-term outlook. The Bank of England (BoE) is set to hike interest rates by 75 basis points on Thursday. In a move that is expected to fall short of the terminal rate of almost 5% in the market, investors believe that the central bank will be dovish in its monetary policy. However, it is still possible for the central bank to cut rates if the economy develops differently.
Meanwhile, the FT reported that Chancellor Hunt is looking to plug a deficit of GBP50bn with tax hikes and spending cuts. However, there are concerns that such an aggressive approach will stoke a deeper recession. Several economists are forecasting that the pound will not reach parity with the dollar until at least 2023. The British pound remains under pressure from high imported energy costs, which is contributing to a current account deficit. The Energy Price Guarantee scheme will also help to reduce government spending, but its success is yet to be determined.
Price is likely to top out at around 1.15
Despite a shaky start to the month, the GBPUSD price is likely to top out at around 1.15 in today's trading session. The Bank of England has set an inflation target of 13.3% for the year and is expected to hike interest rates on Thursday. The increase will add to the costs of borrowing for businesses and millions of consumers.
The pound has been battling a weak dollar in the past few months. But after an impressive jobs report in the US, investors were forced to buy the greenback. However, the US dollar has been gaining ground against the pound. This is largely due to the combination of hawkish Fed bets and safe haven flows.
The market is currently spooked by the prospect of a global recession. This will hurt the UK economy, leading to a decrease in consumer spending and an increase in interest rates.
The US dollar has been rallying based on a combination of hawkish Fed bets, a weaker euro and safe haven flows. Despite this, it is still possible that the pound could reclaim its 1.1500 support level.
However, the GBPUSD price is still off its pre-BoE high of 1.27. Nonetheless, it has bounced back by nearly 50% of the decline from its five-year high of $1.4245 in May. It has also pulled back from its record low of $1.0539 on 28 September.
Price is likely to decline to approach key support 1.2130
Despite positive economic reports, the British Pound continues to decline against the US dollar. The pound is likely to fall to a key support of 1.2130. The US dollar rallied after a 25bp increase in the Fed funds rate. The US housing price index for April 2022 forecast +0.8%. But this is not enough to bolster Dollar buyers.
The Bank of England is expected to hike interest rates in December. However, no change is expected in the asset-purchase program. The BoE needs to balance the need to tighten monetary policy with the pain of consumers.
The Office for Budget Responsibility (OBR) believes the UK is already in recession. It expects real household incomes to drop by 7 percent over the next two years. The government plans to increase public debt. These measures are likely to raise inflation pressure. But they are likely to benefit higher-income households, not middle-class ones.
Nevertheless, if the pound can stay above 1.2130, a further rise is expected. The euro could remain in a strong medium-term upward trend, although it may be forced to retreat.
The Bank of England is expected to raise interest rates by 50bps in December. But Mark Carney said there is no set timetable. He also said the BoE was prepared to take additional steps to support the economy. However, the UK economy faces severe headwinds, with an expected recession starting from the third quarter of 2022.
Price is likely to re-establish its values in early August
Speculators are speculating that the British pound is set to give up its nominal premium over the US dollar. According to Bloomberg's option model, the pound's chances of reaching a 37-year low are high.
This is a major development as the pound has a nominal premium over the USD since the 1970s. This is partly due to the Bank of England's willingness to intervene in times of crisis.
The pound's long term decline against the dollar is partly a result of its interest rate differentials. The US two-year yield continues to move higher while the UK's has fallen.
The British pound was one of the strongest currencies in the world prior to the Great Financial Crisis, when investors fled the country for the US dollar as a safe haven. Now, the pound has lost ground against most major currencies.
The latest round of turbulence in UK politics has calmed, and the pound has found some short-term respite against the US dollar. However, this may not be enough to stop the pound's ongoing slide against the buck.
The latest FTSE 100 index is starting the week on a positive note, paring some of its Friday losses. However, the economic data on the horizon is unlikely to add much to this week's trading.
The GBP/USD exchange rate has fallen below its March 2020 low and could even test its all-time low this week. However, the cyclical low of 1.1412 may hold, and the weekend's remarks from Foreign Secretary Liz Truss may not be enough to stop the pound's slide.
Olga Steiner
https://financeworld.io/!!!Trading Signals And Hedge Fund Asset Management Expert!!! --- Olga is an expert in the financial market, the stock market, and she also advises businessmen on all financial issues.