technical analysis of currencies; The British pound continues to rise against the US dollar

technical analysis of currencies; The British pound rose during trading today, Friday, in the European market against a basket of other major currencies, to continue its gains for the third consecutive session, especially against the US dollar. Many challenges facing the royal economy, foremost of which is the country's separation from the European Union.

By 07:45 GMT, the pound sterling against the US dollar is trading around the 1.2960 level from the opening price of the trading session at 1.2937, and achieved its highest price at 1.2965, while the lowest price was 1.2934.

It is noteworthy that the pound sterling had finished trading yesterday, recording a rise of 0.5 % against the US dollar, in the second daily gain in a row. The Federal Reserve “Central America” during its semi-annual testimony before the US Congress.

On the other hand, the unemployment rate in the United Kingdom decreased during the second quarter of this year to reach 4.5 %, which is the lowest level in 42 years in a positive sign for the British labor market, which also contributes to supporting the possibilities of the British Central Bank to raise interest rates during the half The second of this year.

It is worth noting that the possibilities of increasing British interest rates had reached their peak during the last period, especially after the statements of the Governor of the Central Bank of England, “Mark Carney”, during which he stressed that interest rates may require a rise soon in order to work to confront the high inflationary pressures.

Currency technical analysis

Currency technical analysis

Technical analysis of currencies – the pound sterling rose against the US dollar, surpassing the resistance level and targeting the Fibo line on the daily time frame, as shown in the graphic

Both MACD and Stochastic are showing a positive crossover towards more upside

Today, several important data from Britain are absent from the financial market arena, while investors are awaiting later today many important data about the US economy, represented in inflation data in addition to other data about consumer prices and monthly retail sales, and the positivity of these data will contribute to enhancing the odds US monetary policy tightening.

US dollar slips ahead of US inflation and retail sales data

The US dollar fell during trading today, Friday, in the European market against most of the other major currencies, due to the decline in the US 10-year bond yields. Any new signs on the path of US monetary tightening this year.

By 11:30 GMT, the dollar index fell towards the level of 95.40 points from the opening level of the trading session at 95.53 points, and achieved its highest level at 95.60 points, while the lowest level was at 95.39 points.

It is noteworthy that the index had concluded its trading stable yesterday without any significant changes, this came after it recorded its lowest level in about two weeks at 95.23 points, which was recorded earlier this week's trading.

The decline of the US currency comes under pressure from the decline in US ten-year bond yields, which were affected by the decline in the prospects of tightening monetary policy, especially after the cautious statements by Janet Yellen, Chair of the Federal Reserve, during the first part of her testimony before the Financial Services Committee in the House of Representatives.

Yellen reiterated, during the second part of her semi-annual testimony before the US Senate Banking Committee, that the economy is strong enough to continue to gradually tighten monetary policies. The balance sheet of the Council, which amounts to 4.5 trillion dollars

The Federal Reserve Chair also stressed that the weak inflation rates in the country and the decrease in the neutral interest rate may not leave the field open for monetary policy officials to move towards accelerating the pace of increasing interest rates.

 

Mohamed Abdel Khaleq

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