GBP/USD: decline following other risky assets
Current trend
As a result of the exit of investors from risky assets under the influence of the worsening geopolitical situation in Eastern Europe, GBP/USD consolidated below 1.3200 with the prospect of strengthening the downtrend in the area of 1.3065.
Against the backdrop of continued hostilities in Ukraine, Western countries, including the UK, are imposing more and more new sanctions against Russia and Belarus, as a result of which commodity prices are actively rising. In addition to the already announced restrictions, the UK authorities are exploring the possibility of refusing to import Russian gas. As a result of the growth of energy prices, goods for the population become more expensive and logistics costs increase. According to research, British incomes are expected to fall by an average of 4% in the current financial year, which is equivalent to losing 1000 pounds a year in the family budget. At the same time, annual inflation may exceed 8.4%. Economists expect a significant increase in the UK energy price ceiling by the official regulator Ofgem. It is noted that pensions and benefits will not be indexed at the same rate as tariffs. Benefits are due to increase this spring by just 3.1%, adjusted for inflation, from September 2021.
The long-term downtrend in GBP/USD is intensifying. This week the price broke through the key support level of 1.3200 with the prospect of falling to 1.3065, the breakdown of which will allow the "bears" to consider selling in the area of 1.2905. The key resistance of the trend is shifting to the level of 1.3400.
The medium-term trend changed to a downtrend last week. Traders broke through the target zone (1.3404–1.3370) and now the target for sales is target zone 2 (1.3060–1.3026). The key resistance of the trend is shifting to the levels 1.3460–1.3425. From this area, one can consider opening new short positions on the instrument.
Support and resistance
Resistance levels: 1.3200, 1.3400, 1.3510.
Support levels: 1.3065, 1.2905, 1.2720.
As a result of the exit of investors from risky assets under the influence of the worsening geopolitical situation in Eastern Europe, GBP/USD consolidated below 1.3200 with the prospect of strengthening the downtrend in the area of 1.3065.
Against the backdrop of continued hostilities in Ukraine, Western countries, including the UK, are imposing more and more new sanctions against Russia and Belarus, as a result of which commodity prices are actively rising. In addition to the already announced restrictions, the UK authorities are exploring the possibility of refusing to import Russian gas. As a result of the growth of energy prices, goods for the population become more expensive and logistics costs increase. According to research, British incomes are expected to fall by an average of 4% in the current financial year, which is equivalent to losing 1000 pounds a year in the family budget. At the same time, annual inflation may exceed 8.4%. Economists expect a significant increase in the UK energy price ceiling by the official regulator Ofgem. It is noted that pensions and benefits will not be indexed at the same rate as tariffs. Benefits are due to increase this spring by just 3.1%, adjusted for inflation, from September 2021.
The long-term downtrend in GBP/USD is intensifying. This week the price broke through the key support level of 1.3200 with the prospect of falling to 1.3065, the breakdown of which will allow the "bears" to consider selling in the area of 1.2905. The key resistance of the trend is shifting to the level of 1.3400.
The medium-term trend changed to a downtrend last week. Traders broke through the target zone (1.3404–1.3370) and now the target for sales is target zone 2 (1.3060–1.3026). The key resistance of the trend is shifting to the levels 1.3460–1.3425. From this area, one can consider opening new short positions on the instrument.
Support and resistance
Resistance levels: 1.3200, 1.3400, 1.3510.
Support levels: 1.3065, 1.2905, 1.2720.
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