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GBPUSD Debt Ceiling Talks in the US Continue

2/8/2023 12:31 PM

The GBP/USD pair is declining significantly, trading around 1.2050.

The main reasons for the negative dynamics are serious problems in the national economy, which the International Monetary Fund (IMF) pointed out yesterday: according to its study, the number of bankrupt companies in England and Wales in 2022 increased by 57.0%, and this is the highest since 2009, and this year, according to forecasts, the British gross domestic product (GDP) will lose 0.5%, which is the worst result among all developed countries. The UK is significantly reducing the amount of subsidies allocated to maintain the stability of energy enterprises: in 2022, this amount was about 18.0B pounds, and the payment of 5.5B pounds is scheduled for the current period, although the energy crisis is growing.

The US dollar is reversing downwards, trading around 103.200 in the USD Index. The markets were disappointed by yesterday's speech by the head of the US Federal Reserve, Jerome Powell, who did not comment on the further monetary policy of the regulator but practically repeated the speech of President Joe Biden, noting that the department would be able to stabilize the economy if Congress promptly raised the public debt limit, the decision on which is still not accepted.

On the daily chart, the trading instrument has left the global ascending corridor with dynamic chambers 1.2350–1.2900 and is preparing to decline.

Technical indicators strengthen the sell signal: the range of EMA fluctuations on the Alligator indicator expands downwards, and the AO histogram forms downward bars below the transition level.

Support levels: 1.1906, 1.1486. | Resistance levels: 1.2180, 1.2445.

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