Solid News

GBPUSD Market Update

8/9/2022 1:45 PM

The British pound is trading with multidirectional dynamics, holding near the level of 1.2080. GBP/USD is trying to recover at the beginning of the week after a strong decline last Friday, when the US dollar received a boost against the backdrop of a strong report on the labor market for July.

Nonfarm Payrolls increased in July by 528.0 thousand after an increase of 398.0 thousand in June, while an increase of 250.0 thousand was projected. At the same time, the Unemployment Rate in the United States fell from 3.6% to 3.5%, updating multi-year lows. Thus, the current sharp tightening of monetary policy by the US Federal Reserve is quite justified. At the same time, the Bank of England last week announced a record rate hike of 50 basis points, but warned of a possible recession in the economy as early as the fourth quarter.

The pound is supported slightly today by retail sales statistics: according to data from the British Retail Consortium (BRC), in July Like-For-Like Retail Sales rose by 1.6% after falling by 1.3% a month earlier, while analysts expected a sharp decline in sales by 8.4%.

Meanwhile, according to statistics from the UK postal service Royal Mail, which provides the population with banking services, in July, residents of the United Kingdom withdrew from their accounts a record 801.0 million pounds, which is 20% more than in the same period last year. Royal Mail says this is primarily due to increased travel across the country and the desire of customers to have cash when planning their travel budget in a difficult economic situation: this year more than 70% of Britons going on holiday preferred fiat money. However, analysts are sure that this is a temporary trend, as digital instruments have taken a leading place both in investing and in daily calculations.

In the D1 chart, Bollinger Bands are reversing horizontally. The price range is narrowing, reflecting ambiguous dynamics of trading in the short term. MACD is declining keeping a weak sell signal (located below the signal line). The indicator is trying to consolidate below the zero level. Stochastic, having approached the level of "20", reversed into a horizontal plane, reacting to corrective moods at the beginning of the week.

Resistance levels: 1.2133, 1.2236, 1.2292, 1.2400. | Support levels: 1.2054, 1.2000, 1.1933, 1.1854.

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