Technical GBP/USD is facing down a major psychological resistance point around 1.3500. It’s doing all it can to recover from its recession-era hits. On Wednesday, the pair showed signs of cutting its losses early in European trade, a testament to the risk-on tone that has prevailed across on investor minds.
Market participants are intently focused on the recent volatility in the GBP/USD exchange rate. They’re especially focused on comments provided by acting Governor Hawkesby, breaking down his observations to glean actionable intelligence. Analysts are hanging on his every word, looking for new hints about what’s to come with interest rates. Such revelations have the potential to significantly affect GBP/USD’s performance.
As the European trading session unfolds, the GBP/USD pair has shown resilience, moving away from deeper losses experienced earlier in the week. This makes the current recovery special. Hence, they are extremely sensitive to changes in economic data and monetary policies that have the ability to affect currency values.
Market analysts forecast that GBP/USD will depend heavily on the Bank of England (BoE)’s economic outlook. They’re hoping that this report will have a big enough impact to get the markets moving. Acting Governor Hawkesby to signal a shift in approach to monetary policy. Investors are always looking to get ahead of any hints that may signal a shift in interest rate policy. A change in rates will exacerbate or moderate the pound’s momentum in either direction. Reauthorization will come fast, and traders need to be ever vigilant to stem backsliding on these developments.
Now all traders are watching the 1.3500 level. It’s the technical milestone that serves as the psychological barrier. If the GBP/USD can solidly push through this resistance, it could open up room for more upward movement. On the other hand, inability to maintain momentum at all time high could invite fresh round of selling.