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Authorities are Exploring the Possibility of Launching a Digital Pound

2/10/2023 10:17 AM

The GBP/USD pair is trading with downward dynamics, correcting after a three-day increase, which led to the renewal of local highs from February 3. Today, the pound is trying to consolidate below 1.2100, waiting for the publication of a block of macroeconomic statistics from the UK.

Among other things, the release of data on Gross Domestic Product (GDP) is expected. The economy is projected to slow down by 0.3% in December after increasing 0.1% a month earlier; in quarterly terms, GDP may show zero dynamics, having recovered from -0.3% in the previous quarter, and in annual terms it may correct from 1.9% to 0.4%. Investors will also evaluate statistics on Industrial Production volumes: forecasts suggest a drop in the indicator by 0.2% in December, which will repeat the data of the previous month, and in annual terms, the dynamics may worsen from -5.1% to -5.3%. It is also worth paying attention to the speech of the Chief Economist of the Bank of England Huw Pill, who can present his vision of the future course of monetary policy.

The British financial regulator, together with the national Treasury, presented a plan to create a digital pound, which, according to the authorities, although not being able to replace fiat money, will expand the possibilities for making payments, becoming a reliable and affordable tool in the context of the digitalization of the economy. Treasury Secretary Jeremy Hunt said that before launching the pilot project, officials will assess all the risks to the country's financial system, since already at the first stage the initiative will require significant investments and global measures to ensure data security. In the case of the introduction of a digital currency, the launch of which, according to experts, may take place at the end of this decade, initially there are likely to be restrictions on the amount that can be held by individuals and legal entities, and the coin can be used through electronic wallets on smartphones or smart cards.

Bollinger Bands in D1 chart demonstrate a stable decrease. The price range is changing slightly, but remains rather spacious for the current level of activity in the market. MACD has reversed to growth having formed a weak buy signal (located above the signal line). Stochastic keeps a confident upward direction, located approximately in the center of its area, which indicates sufficient potential for a "bullish" trend.

Resistance levels: 1.2150, 1.2192, 1.2240, 1.2311. | Support levels: 1.2084, 1.2000, 1.1900, 1.1800.

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