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GBPUSD Upward Dynamics of Trading in the Asset

1/11/2023 2:05 PM

This week, the GBP/USD pair made an attempt to grow, rising to the 1.2200 area, where it is currently trading.

The increase in quotations was facilitated by the release of data on the US labor market, according to which wage growth slowed in December, which is a sign of a weakening of inflationary pressure in the economy. These statistics strengthened investors' confidence that the US Fed will continue to reduce the pace of interest rate hikes and weaken the position of the US currency. Currently, prices have stabilized again, as the market is waiting for the publication of December statistics on the consumer price index in the USA, since it is on its basis that officials will make final decisions about their future actions. It should also be noted that at yesterday's speech, the head of the department, Jerome Powell, limited himself only to the remark that the US Fed may take politically unpopular actions to restore price stability.  

The position of the British pound also looks insufficiently certain for investment. Overall, market sentiment is improving as investors are betting on a less significant recession in the British economy due to lower energy prices and a mild winter contributing to a reduction in gas consumption. The experts of the Goldman Sachs agency said that the gross domestic product (GDP) of the UK this year may decrease by only 0.7% instead of the previously expected 1.0%. At the same time, a significant strengthening of the pound's position is hindered by mass protest actions and a reduction in government support measures for business.   

Technically, the key for the "bulls" remains the mark of 1.2207 (Murray level [6/8]), a breakout of which will give the prospect of further growth to the levels of 1.2451 (Murray level [7/8], Fibo retracement 50.0%) and 1.2695 (Murray level [8/8]). If the price consolidates below 1.1962 (Murray level [5/8]), the decline will be able to resume to the area of 1.1718 (Murray level [4/8]) and 1.1540 (Fibo retracement 23.6%).

Technical indicators do not exclude a downward movement: the Bollinger Bands are directed downwards, the MACD histogram is at the zero line, its volumes are insignificant, and the Stochastic has entered the overbought zone, which may lead to a trend change.

Resistance levels: 1.2207, 1.2451, 1.2695. | Support levels: 1.1962, 1.1718, 1.1540.

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