remains near its August 2021 highs, holding around 1.3834 on Thursday, as increased US dollar volatility continues to weigh on the pair.
Market participants react to comments from US Treasury Secretary Scott Bessent stating that Washington has no plans to intervene in currency markets by selling dollars against the yen. This statement has added to the prevailing sentiment of a “sell America” strategy, which is putting downward pressure on the dollar.
With the US Federal Reserve expected to keep interest rates unchanged, market attention has shifted to the Bank of England. The consensus is that the Bank of England will keep its key interest rate at 3.75% at next week's meeting. This expectation is supported by rising inflation, which reached 3.4% in December, along with recent retail sales data showing increased price pressures.
Technical analysis
According to the H4 chart, GBP/USD is currently undergoing a correction from the 1.3845 level. The market may continue this pullback to the support at 1.3765, before potentially bouncing higher. The first target of any bullish move would be the resistance at 1.3960, followed by 1.4020. This scenario is confirmed by the MACD indicator, which shows a downward trend but remains above the zero level.
On the H1 chart, the correction from 1.3845 continues, with the next support target around 1.3765. A rebound from this level could push prices higher, supporting further bullish momentum. This is confirmed by the stochastic oscillator, which shows a drop but remains below 80.0.
Conclusion
GBP/USD remains strong at its recent highs and attention now turns to the next decision from the Bank of England. While the pair is currently in a correction phase, the prospects for further growth remain positive, depending on the Bank of England's response to inflationary pressures.
By RoboForex Analysis Department
Disclaimer: Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
