GBP/USD crawls higher and approaches 1.3650
|- The sterling remains bid and approaches 1.3650.
- Expectations of a BoE rate hike are pushing the pair higher.
- GBP/USD: Further decline towards 1.3163/58 remains in the cards – DBS Bank.
The sterling is set for its fourth positive day in a row, extending its rebound from year-to-date lows near 1.3400 last week to session highs right below 1.3650 at the time of writing.
BoE’s rate hike expectations are buoying GBP demand
The pound firmed up over the last days, to pare losses from the previous two weeks. The markets seem to have shifted the focus from the fuel shortages and supply disruptions in the UK to the possibility that the Bank of England will lead the major central banks on hiking interest rates.
On the macroeconomic front, September's UK services sector’s activity revised upwards to 55.4 from preliminary estimations of 54.6. The prices component, however, increased at record levels, with new orders plunging amid shortages of supply and staff that might deteriorate the sectors’ growth prospects.
GBP/USD: further falls to 1.3163/58 remain likely – DBS Bank
According to FX Analysts at DBS Bank, however, point out to a triangle pattern that might send the GBP to the mid-range of 1.3100: “The triangle can eye a probe towards the 38.2% Fibonacci retracement of the 1.1412-1.4248 range grip (at 1.3158), which covers the covid flash lows and its highest recovery point. In the same price zone, we have on sight strong support offered by the 200-week moving average of 1.3163.”
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.