FX.co ★ GBP/USD

The GBP/USD exchange rate is still rising within its yearly trading range. At the close of the week, solid US job market data spurred a furious assault by sellers, but they confronted Bullish Imbalance 32. It was said yesterday that purchasers would benefit from a corrective retreat because it would give them a chance to establish fresh long positions. This outlook has been validated by today's price action. It is unlikely that sellers will have sufficient momentum to overcome Imbalance 32 today. The bullish impulse within the trading range remains intact, and the target around 1.3670 has yet to be reached. As a result, given the present situation, a buy signal is anticipated to develop within Imbalance 32, maybe followed by another increase in the value of the pound the following week. Naturally, shifts in the news landscape may have an impact on traders' plans, but it is impossible to forecast future events with absolute certainty. Buyers currently have great opportunities for future profits. The Bank of England tightened monetary policy for the first time this week, which normally encourages traders to feel optimistic. The market response to this highly hawkish move was somewhat varied. Although the outcome of the Bank of England meeting could be regarded as the most hawkish possible, buyers did not resume their advance. In addition to raising interest rates as anticipated, the Bank of England's Monetary Policy Committee (MPC) unanimously decided to tighten monetary policy. This offers reasons to predict more policy tightening, maybe as early as December. As a result, the dollar dominated this week's last trading sessions, but over the coming weeks, the pound may gain ground.

GBP/USD recovered from the 1.3454–1.3469 resistance level on Tuesday, reversed in favour of the US dollar, and then fell to the 38.2% Fibonacci retracement level at 1.3342 on the hourly chart. The pound would benefit from a rebound from this level and a possible return to 1.3404 and 1.3454. Further drops toward the next retracement level at 1.3263 would be indicated by consolidation below 1.3342. The mood of the market has become pessimistic. While the new downward wave fell below the previous low, the most recent completed rising wave was unable to break the prior high. As a result, the bears have momentarily taken the lead. While forecasts of tighter monetary policy from the Bank of England are only starting to gather steam, the market has already factored in the possibility of stricter FOMC monetary policy in the near future. After the corrective retreat is over, a continuation of the pound's gain is anticipated. The bears were able to launch another assault on Tuesday due to the news backdrop, even though this shouldn't have happened under normal conditions. In my opinion, the publication of the US inflation data has not altered the likelihood of tighter FOMC monetary policy in December. The Federal Reserve had already taken a hawkish posture even before the October Consumer Price Index was announced, so even if inflation increased somewhat faster than anticipated, this little upside surprise is unlikely to alter the Fed's approach. Additionally, the market has enough time to factor in a rate increase by the Fed in December. As a result, inflation did climb more than anticipated, which may somewhat raise the possibility of tighter monetary policy the following year. However, a lot of things might happen between now and the start of next year, necessitating many revisions to all inflation and interest rate projections. Therefore, at this point, no broad generalizations should be made. But there is a definite short-term perspective. There aren't many causes remaining to sustain additional rises, but the dollar was able to advance considerably on Friday and Tuesday for rather good reasons.