GBP/USD Technical Analysis: Gloomy Outlook for Britain

The US dollar was strongly bid at the start of the first London session of 2023 as both the euro and the British pound fell sharply. For the GBP/USD currency pair, it fell to support at 1.1899 before settling at 1.2065 at the time of writing. The sharp rise in the dollar is a timely reminder that it is too early to dismiss the best performing currency of 2022. Advertisement Whether you are an investor or speculator, there are many great opportunities to trade UK Start NOW! Comment on activity. „Currency markets are also reviving this morning as the dollar pulls lower,” says Société Générale analyst Kenneth Brooks. „The reversal in medium-term yields and the move in the dollar occurred on a day without fresh macro news… This can only indicate that the rise in yields and weakness in the dollar last week were exaggerated and related to the end of 2010 . year and weak liquidity January is a strong month for the US dollar at GBP/USD weakness likely in the coming weeks Much will depend on how global investors act and whether the bear market can extend We have covered views from several economists that the bear market is far from over and a more sustained turnaround may not begin until the middle of the year. If so, the pound may remain under pressure in the coming weeks against the dollar as well, and the euro’s support will improve. Overall, the British currency had a soft end to 2022 due to weak demand in broadly unsupported global markets – supported by weak equity markets – and continued consensus that the UK economy will struggle in 2023. The fall in Sterling coincided with a sharp rise in gas prices in Europe due to seasonally high temperatures, increased wind generation and increased LNG supplies. This reduces energy regulatory options and lower fuel costs ensure that the worst of the crisis is in the past. But fuel prices also fell in Britain, where gas for January supply is trading lower than when Russia invaded Ukraine. This significantly improves the economic outlook for next year and could overturn the consensus forecast that the UK has lagged behind the world’s advanced economies. The early interest comes from an annual survey of economists by The Times, which found that „Britain is on track to be among the world’s worst economies this year”. The 0 economists surveyed were drawn from cities, academies and think tanks and gave their forecasts after the last rate of the year from the BoE in December: in line with the consensus of institutional analysts and aversion to the British. a pound But the British currency will still do better if the consensus is turned on its head. Morgan Stanley believes this sterling rally has been driven by positioning and broad dollar weakness rather than a change in the fundamental outlook. Expectations of weak economic growth in the UK will lead to a continuation of the energy crisis to weaken economic growth and ensure that inflation will accelerate. Morgan Stanley lists the rally of the pound as one of the 10 surprises that financial markets could do in 2023. As mentioned, British wholesale energy prices have fallen significantly and several major contracts are now ahead of pre-attack levels. Today’s GBP/USD Forecast: My technical view on the GBP/USD price remains unchanged as the overall trend remains bearish. Convergence and movement around and below the psychological support level of 1.2000 confirms this. Given the gloomy outlook for the British economy this year, it is possible to quickly sell the pair GBP / USD for profits. As the bearish outlook continues, bears have a chance to move to the support levels of 1.19 0 and 1.1810. The last and lower level is enough to push the technical indicators to oversold levels. On the other hand, according to the development of the daily chart, the pair GBP / USD has no chance to change the current bearish perspective of 1.2330 without breaking the resistance, otherwise the stronger bears will remain in control.

James Rogers

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