GBP/USD drifts past 1.2800 as bulls consolidate more momentum

Richard Adrian•Tuesday, July 11, 2023•1 min read

The US dollar entered into another week of losses characterized by low highs and a three-week low. On the other hand, the strengthening British Pound (GBP) has served as a bullish push for the GBP/USD pair. The trading pair has risen by 7.1% over the last 1 year and is headed towards a 15-month high, around 1.29. However, the pair’s strong momentum met resistance at 1.28461 on Friday, resulting in a gradual fall to 1.2823 and another sharp decline to 1.27528 on Monday.

The drop on Monday can be attributed to an announcement by Fed officials about the end of this monetary policy tightening cycle. Thereby resulting in a sharp fall in U.S treasury bond yields, thereby activating USD bulls to form a strong support for the currency.

The GBP/USD recovered from the supply level yesterday, with bulls already breaking the 1.28461 resistance. Last week’s momentum picked up on Friday following the release of ADP employment data and strong ISM services. The continued bullish momentum is against the backdrop of those Friday’s positive gains, however, we expect to see higher lows and high highers in the course of this week’s GBP/USD.

The Bank of England (BoE) is expected to raise interest rates by another 130 basis points by the end of the year. This is because inflation is still too high, even though it is expected to decrease over the rest of the year. The BoE’s goal is to bring inflation down to its target of 2%. This news is supporting the value of the British pound (GBP) against the US dollar (USD).

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ABOUT THE AUTHOR See More

Richard Adrian

Fintech UX Writer

Richard has 5 years of experience as a content writer in the fintech niche. Richard's main interest is in innovations and models that drive financial change, more particularly, domains around DeFi, Fund Management, blockchains, decentralized applications and blockchain gaming.