Latest News

GBP/USD on July 22, 2022

Relevance up to 08:00 2022-07-23 UTC–4

Hi, dear traders! According to the H1 chart, GBP/USD tested 1.1933 twice, only to bounce upwards. However, the pair did not rise significantly afterwards. At the moment of writing, GBP/USD continues to move near this level. If the pair settles below it, it could then fall towards the retracement level of 685.4% (1.1684). There are no serious factors that really could have prompted today’s dip of GBP/USD. In the EU, the ECB meeting results were mixed, and PMI data showed a strong decline. In the UK, on the other hand, the Bank of England’s policy meeting is yet to come – it will only take place in a week and a half. The UK business activity indexes did not decrease significantly: services PMI reached 53.3 points, manufacturing PMI eased to 52.2 points, and composite PMI hit 52.8 points. All business activity indexes remained above 50 and only lost about 1 point. As a result, GBP/USD declined slightly, but remained above the key level of 1.1933. US PMI data could also drop below 50 points for one or two indexes, amid continuing speculation about a possible recession in the US and falling GDP. It should give support to the pound sterling, but currently traders do not seem to actively open longs on GBP/USD. Market players are awaiting the results of meetings of the Fed and the BoE, which will take place next week. Both central banks could hike interest rates by more than 0.25%, as even the ECB has increased interest rates by 0.50%. However, USD is very likely to go up against GBP next week, perhaps even on Monday. Few market players doubt the Fed would increase the interest rate by at least 0.75%.

According to the H4 chart, GBP/USD has reversed downwards. If the pair settles below 1.1980, it could continue to fall towards the retracement level of 161.8% (1.1709). The descending trend line indicates that the sentiment of traders remains bearish. Indicators show no signs of emerging divergences today.

Commitments of Traders (COT) report:

Non-commercial traders became slightly more bearish last week. Traders closed 5,768 Long and 2,887 Short positions. Market players remain bearish on GBP/USD, and Short positions continue to outnumber Long ones greatly. Major players continue to decrease their exposure to GBP, and their sentiment has remained unchanged recently. GBP/USD could continue to fall in the next several weeks. While the pair could move upwards, it could still be only a 2-3 day correction followed by a renewed decline.

US and UK economic calendar:UK – Services PMI (08-30 UTC).UK – Manufacturing PMI (08-30 UTC).UK – Composite PMI (08-30 UTC).US – Services PMI (13-45 UTC).US – Manufacturing PMI (13-45 UTC).US – Composite PMI (13-45 UTC).

The pound sterling decreased slightly following the release of UK PMI data. The same could happen to the US dollar after the release of US PMI data. Overall, the data release could have a limited influence on traders.

Outlook for GBP/USD:New short positions can be opened if GBP/USD settles below 1.1933 on the H1 chart targeting 1.1684. Long positions can be opened if the pair bounces off 1.1933 on the H1 chart with 1.2146 being the target.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Benefit from analysts’ recommendations right now

Top up trading account

Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News