Home Forex Markets GBP/USD is trapped in a “double top”, non-farm payrolls are the last chance for bulls

GBP/USD is trapped in a “double top”, non-farm payrolls are the last chance for bulls

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GBP/USD is trapped in a “double top”, non-farm payrolls are the last chance for bulls

The British pound stopped at 1.2450 for three consecutive months, and the Bank of England interest rate failed to break through this line. The US non-agricultural data became the last chance, otherwise the price plummeted to 1.2000.

The fundamentals of the UK are bad, and the central bank’s continuous interest rate hikes are ineffective

At present, the UK has the highest inflation among the G10 countries. The UK’s economic situation is extremely severe. The recent strike action undoubtedly made things worse. After two prime ministers, the people and the market are still waiting for the British economy to improve.

Following the Fed’s 25 basis point rate hike, the Bank of England announced a 50 basis point rate hike on Thursday, the tenth rate hike since December 2021. The central bank’s rate hike aims to suppress inflation. However, food prices in the UK are still at multi-year highs, and the market Doubts about the market outlook failed to boost the trend of the pound, and eventually the exchange rate rose and fell.

Investors also focused on the performance of the dollar as a rival currency. As inflation continued to cool down, the market bet on the Fed raising interest rates by 25 basis points, and even looked forward to cutting interest rates in the second half of the year. The U.S. dollar continued to fall, which promoted the rebound of the pound.

The market is obviously more willing than the Fed to go. The dollar seems to be oversold, which also paves the way for the dollar’s counterattack at any time.

market todayPay attention to the US non-agricultural data in January, may further guide the trend of the US dollar, and then affect the trend of the pound. If the non-agricultural data continues to depress the dollar, it is advisable to pay attention to whether the pound can break through 1.2400-50. huge. On the contrary, the exchange rate of the pound has the opportunity to point to the 1.3000 mark.

GBP/USD technical trend: Double-top pressure strengthened, breaking 1.2180 and falling sharply

The author reminded and deconstructed the double-top trend in the article Super Financial Week on January 30, alerting to the “double-top” of the British pound/dollar (GBPUSD). If the exchange rate continues to fall below today’s low of 1.2180, it will effectively break below the 1.2200 line, and then continue to test for new lows. The next key support is at the 1.2000 mark. However, the three-month double-top neckline is at 1.1800, and there is enough room for decline, so pay close attention to the performance near the neckline.

If the price of the pound rebounds, it still needs to effectively break through 1.2450-1.2400 and hold steady to break through the suppression of the double-top pattern and continue to rise. Any false breakout could still trigger a return of bears.

(by Arthur)

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