top of page

Title: GBP/USD aims to overstep 1.2000 as DXY sees more pain, Fed policy in focus

  • Writer: analysiswatch
    analysiswatch
  • Jul 25, 2022
  • 1 min read

July 25, 2022 12:05 AM ET


By: AnalysisWatch


The GBP/USD pair has recovered half of its intraday losses and aims to regain the psychological resistance of 1.2000. The currency pair has entered a corrective phase after reaching a high of 1.2064 on Friday. On a broader level, the asset is showing choppy movements as the US Dollar Index (DXY) completed a sideways movement last week.


In recent months, the uptrend in the DXY has been supported by expectations of higher interest rates and positive economic data. The option of a 1% rate hike by the Federal Reserve (Fed) is off the table for now.


However, investors are still betting on a 75-basis point (bps) rate hike on Wednesday.


While U.S. economic data suggests a bumpy ride, Wall Street is reporting generally weak gains. In addition, Google has halted its hiring process, and Ford plans to lay off 8,000 employees. This could lead to a slump in job creation and eventually in the overall labor market, which may not be stable enough to support the Fed raising interest rates without hesitation.


In the UK, the pound bulls weakened after the release of poor retail sales data. The economic data came in at -5.8%, lower than the consensus forecast of -5.3% and the previous release of 4.7%. It is worth noting that rising energy bills are already driving retail sales higher. Galloping inflation should have pushed the retail sales estimate higher. However, the lower consensus suggests that aggregate demand is so low that even price pressures are unable to lift it above its prior release.

Comments


2b94f773-a237-4da7-a599-6b42314ed9e6.png

Risk Disclosure: AnalysisWatch will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible. Currency trading on margin involves high risk, and is not suitable for all investors. Before deciding to trade foreign exchange or any other financial instrument you should carefully consider your investment objectives, level of experience, and risk appetite.
AnalysisWatch would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore AnalysisWatch doesn’t bear any responsibility for any trading losses you might incur as a result of using this data.

bottom of page