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Market Outlook
Will GBP/USD rebound lasts? - Zeal Capital Market

Will GBP/USD rebound lasts?

21-07-2022 03:43

“UK’s inflation hit its highest level in 40 years, tightening looms but expects moderation.”

Pound sterling stages its rebound from lower level, buoyed by recent release of economic data in UK. Yesterday, annual data shows that CPI rose 9.4%, well above consensus of 9.3%. While the number remains at its highest level in 4 decades, it is unlikely to steer the path of policy tightening by Bank of England. BoE is likely to adopt a safer route ahead as Brexit headwinds has yet to subside.

Quick recap of GBPUSD

With regards to long-term structure, the pair is skewed towards the downside.

GBPUSD Weekly Technical Analysis

Will GBP/USD rebound lasts? - Zeal Capital Market

In weekly perspective, GBPUSD shows some sign of bulls taking over due to strong pullback near 1.1800 threshold.

GBPUSD Daily Technical Analysis

Will GBP/USD rebound lasts? - Zeal Capital Market

From daily perspective, the pair is expected to propel further upwards. Nonetheless, 1.2300 will remain as the main hurdle for sterling-bears where we expect continuation of long-term structure in mid to long-run.

Trading Idea

Will GBP/USD rebound lasts? - Zeal Capital Market

ORDER: SELL LIMIT

ENTRY: 1.2200

STOP LOSS: 1.2500

Target 1: 1.1860

Target 2: 1.1680

ZFX Analyst’s Comment

For the time being, we expect GBPUSD to experience short-term bull takeover. We would monitor for any breakout near 1.2300 hurdle that could safeguard the bears to regain their momentum in the mid-term.

Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.

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