GBP - Sterling gradually sees adjustment pressure, focus on UK interest rate meeting

Sterling is gradually under adjustment pressure, pay attention to the UK interest rate meeting

The overall foreign exchange market remained in a tight range on Wednesday as market participants prepared for major central bank meetings, including Thursday's European Central Bank and Bank of England meetings. Sterling has shown a little taking pressure against the dollar this week. Investors expect the Bank of England's tightening cycle to end soon. It will raise interest rates by 50 basis points on Thursday and 25 basis points in March. At the same time, they will also pay attention to the Bank of England's monetary policy The Committee's latest economic forecast. Britain is the only G7 country whose growth outlook for 2023 has been downgraded in forecasts released by the International Monetary Fund (IMF) on Tuesday.

The trend of GBP/USD, technical chart RSI and stochastic index have fallen from the overbought area, while the exchange rate hit a high of 1.2445 in December last year, which closely to last week's position, and is gradually going down, so we need to be careful of GBP/USD's further decline It seems that a callback will be carried out. The 25-day moving average is currently at the level of 1.2120. If the pound falls below this indicator in the market outlook, it is expected to be more certain that it will usher in a new downward trend. Calculating the golden ratio, the 23.6% and 38.2% callback levels are 1.1960 and 1.1660, and the extension to 50% and 61.8% is 1.1415 and 1.1170 levels. As for the greater resistance above, it is expected to be the 1.25 points to the high of 1.2666 last May.

This week's news:
UK consumer credit rises by £493m in December
UK mortgage lending rises by £3.238bn in December
UK mortgage approvals hit 35,612 in December
The supply of M4 goods in the UK in December decreased by 0.8% from the previous month

Estimated volatility:
Resistance 1.2500 – 1.2666
Support 1.2120* – 1.1960 – 1.1660 – 1.1415






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