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- GBP/USD Is Unlikely to Hold Above 1.25
GBP/USD Is Unlikely to Hold Above 1.25
The British Pound is seemingly going to join weakening currencies against the U.S. Dollar. Aussie and Kiwi already dropped to their lows of November 2022 during the last two weeks, while the Japanese Yen even accelerated its further slide on Tuesday, as USD/JPY climbed to the next big figure of 147. Yields of the U.S. benchmark 10-year Treasury bonds are high above 4.20%, making the Greenback more attractive for conservative and short-term investors, boosted by a wave of the Federal Reserve's (Fed) chair Jerome Powell hawkish comments at Jackson Hole symposium last Friday. The Fed is prepared to raise its interest rates further if needed and hold them at a restrictive level, until it would be fully convinced that inflation is heading toward its 2% long-term goal.
It would be unlikely that GBP/USD may be able to hold above its current 1.25 technical support, despite those headwinds from the north, especially after it already said goodbye to its former lows of August and mid-June, at 1.2615 and 1.2590 respectively. Even though the U.S. PCE (personal consumption expenditure) price index data on August 31 may make some moderate adjustment into market's expectation on the Greenback, a short position in GBP/USD, with the first target between 1.2330 and 1.2390, looks reasonable. A proper stop-loss order could be placed just several points above 1.2720.
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