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Saturday, January 28, 2023

GBPUSD falls towards 1.1850, focus on UK autumn budget

  • GBPUSD is coming under some selling pressure amid slight improvement in demand for the dollar.
  • The dollar benefited from a rise in US bond yields and cautious markets.
  • The downside looks limited as traders await the UK government’s fiscal plan.

couple GBPUSD has declined sharply 1.from the daily high of 1958 and falls to new daily low around 1.1850 area during the first half of the European season.

US Dollar Gains Some Positive Traction And reverses the minor losses of the previous day, which becomes a major factor putting some pressure on GBPUSD. Upbeat US retail sales data on Wednesday may have forced investors to lower their expectations for less aggressive Fed tightening policy. US Treasury yields improve along with cautious market sentimentThe safe haven provides some support to the US dollar.

investors seem Concerned about the possibility that a new outbreak of COVID-19 in China will further impact activity Against the backdrop of rapidly rising borrowing costs. In addition, continuing geopolitical tensions are putting pressure on global risk sentiment. That said, growing acknowledgment that the Bank of England will keep raising borrowing costs to combat stubbornly high inflation could act as a tailwind for sterling. This, in turn, will help limit any deeper losses for the GBP/USD pair.

operator too May prefer to wait for UK government’s financial plan Before opening aggressive positions and setting yourself up for a firm direction in the short term. Chancellor Jeremy Hunt will release his Fall Budget later today expected to reduce the size of the tax gap, This will be instrumental in boosting the sentiment around the British pound. Furthermore, traders will look to US macro data as a reference to take advantage of some short term opportunities around the GBP/USD pair.

Thursday’s US economic calendar will have the Philadelphia Fed manufacturing index and normal opening weekly jobless claims later in the US session. This, along with speeches from several FOMC members and broader market risk sentiment, will influence USD price dynamics and provide a significant boost to GBPUSD.

GBPUSD Technical Levels

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