• GBP/USD closes the week above 1.3600 frem 1.3405 lows in late September.
  • BoE tightening expectations have fuelled the pound's recovery.
  • GBP/USD seen at 1.41 in 2022 – Westpac.

The British pound has found support at 1.3610 after having hit resistance at one-week highs of 1.3660 earlier today. The pair consolidates above 1.3600 after a significant recovery from year-to-date lows near 1.3400 last week.

Pound appreciates on BoE hike expectations

The sterling appreciated across the board this week, as market expectations of a BoE hike next year have offset investors’ concerns about the fuel shortages and supply disruptions that pushed the GBP top mid-term lows last week.

Market sources are anticipating the possibility of the Bank of England leading the rest of the world’s major central banks to start raising interest rates in order to tackle inflation pressures. In that case, the market is pricing the first interest rate hike next February.

Furthermore, the widely awaited US Non-Farm Payrolls report has disappointed, showing a 194,000 increase in employment, well below market expectations of 500,000 new jobs. The dollar retreated immediately after the release, to pare losses shortly afterward, as the market assumed that these figures would not change Fed’s plans to start tapering bond purchases over the next months.

GBP/USD seen appreciating to 1.4100 in 2022 – Westpac

According to the FX Analysis Team at Westpac a more hawkish stance by the BoE is likely to support a long-term upside cycle, sending the pair towards 1.4100: “Its fuel shortage notwithstanding, the UK is expected to experience a robust recovery in GDP back to near the potential GDP level that would have been seen had the pandemic not occurred as well as sustained inflation at or above target over the entire forecast period. As a result, the BoE is expected to tighten, in line or just ahead of the FOMC (…) We look for GBP/USD to rise to 1.41 in the second half of 2022, and to only edge back to 1.39 at end-2023.” 

Technical levels to watch

GBP/USD

Overview
Today last price 1.3624
Today Daily Change 0.0004
Today Daily Change % 0.03
Today daily open 1.362
 
Trends
Daily SMA20 1.3667
Daily SMA50 1.3749
Daily SMA100 1.3851
Daily SMA200 1.3845
 
Levels
Previous Daily High 1.3638
Previous Daily Low 1.3571
Previous Weekly High 1.3729
Previous Weekly Low 1.3412
Previous Monthly High 1.3913
Previous Monthly Low 1.3412
Daily Fibonacci 38.2% 1.3612
Daily Fibonacci 61.8% 1.3596
Daily Pivot Point S1 1.3581
Daily Pivot Point S2 1.3542
Daily Pivot Point S3 1.3514
Daily Pivot Point R1 1.3648
Daily Pivot Point R2 1.3677
Daily Pivot Point R3 1.3716

 

 

 

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD stays below 0.9800 after US inflation data

EUR/USD stays below 0.9800 after US inflation data

EUR/USD continues to trade in negative territory below 0.9800 in the American session on Friday. The data from the US showed that the annual PCE inflation declined to 6.2% in August but the stronger-than-expected core reading didn't allow the pair to gain traction.

EUR/USD News

GBP/USD rebounds from daily lows, reclaims 1.1100

GBP/USD rebounds from daily lows, reclaims 1.1100

GBP/USD fell to a fresh daily low below 1.1030 but managed to reverse its direction and climbed above 1.1100 during the American trading hours on Friday. The pair remains on track to snap a two-week losing streak despite having suffered heavy losses earlier in the week.

GBP/USD News

Gold extends daily rally beyond $1,670

Gold extends daily rally beyond $1,670

Gold preserved its bullish momentum and rose above $1,670 after the mixed inflation data from the US on Friday. The benchmark 10-year yield is down more than 2% as markets look to wrap up the third quarter, fueling XAU/USD's daily rally. 

Gold News

Shiba Eternity download day the biggest bullish catalyst in SHIB history?

Shiba Eternity download day the biggest bullish catalyst in SHIB history?

Shytoshi Kusama, the project lead for Shiba Inu, has dropped a teaser about Shiba Eternity games for the SHIB community. Proponents expect the launch of the collectible card game to be a bullish catalyst for Shiba Inu price. 

Read more

SPDR S&P 500 ETF Trust (SPY) Forecast: We are teetering on the brink

SPDR S&P 500 ETF Trust (SPY) Forecast: We are teetering on the brink

Equity markets remain at the precipice of a technical collapse, which we examine in the weekly long-term chart below. The overall picture remains one of nervousness ahead of the upcoming Q3 earnings season.

Read more

Forex MAJORS

Cryptocurrencies

Signatures