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The Pound Tries to Recover from Record Lows

8/24/2022 12:50 PM

The British pound is showing mixed dynamics, testing 1.1830 for a breakout. The day before, the GBP/USD pair showed a moderate corrective growth, which was partly caused by the depreciation of the US currency in almost the entire spectrum of the market.

Among other things, pressure on dollar quotes was exerted by weak macroeconomic statistics from the US. Thus, the Manufacturing PMI from S&P Global in August corrected from 52.2 points to 51.3 points, although analysts expected a decrease to only 52.0 points, and the Services PMI fell sharply from 47.3 points to 44.1 points, while it was expected that the indicator would rise to 49.2 points. However, it should be noted that the British statistics also turned out to be disappointing: the Services PMI in August corrected from 52.1 points to 46.0 points, while the forecast was at the level of 51.1 points.

Investors today are in no hurry to open new trading positions, preferring to wait for the results of the symposium in Jackson Hole, which is to be addressed by US Federal Reserve Chairman Jerome Powell. The official is expected to give clear signals on the pace of interest rate hikes in September and beyond, as well as comments on the prospects for a recession amid deteriorating energy markets.

Meanwhile, London Mayor Sadiq Khan said most people in the country will not be able to pay their heating bills and even afford food this winter amid record inflation, which has reached 10.1% in annual terms, the highest since 1982. According to Bloomberg analysts, electricity tariffs will reach 4K pounds per month by January next year. The UK Office of Gas and Electricity Markets (Ofgem) may set a price ceiling of around 4.266K pounds in the first months of next year, nearly 0.650K pounds more than the agency's previous forecast.

Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range expands from below, making way for new local lows for the "bears". MACD is going down, keeping a fairly stable sell signal (located below the signal line). Stochastic, having retreated from its lows, is trying to recover, indicating the corrective growth development in the near future.

Resistance levels: 1.1854, 1.1933, 1.2000, 1.2054. | Support levels: 1.1800, 1.1758, 1.1700, 1.1650.

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