empty
10.12.2022 01:43 PM
GBP/USD: by the end of the week

This image is no longer relevant

After falling during Friday's Asian trading session, the dollar then rose at the beginning of the European session. Thursday's story seems to be repeating itself.

After hitting an intraday local low of 104.44, the DXY futures were back on the rise, climbing to the proverbial 105.00 mark. The dollar and its DXY index remain under pressure despite dollar bulls' attempts to regain control.

There are 3 weeks left till New Year, but the situation in the financial markets is not becoming less tense, though some big players of the financial market have already summed up the results of the year and are gradually closing positions, balancing their investment portfolios and going out of the market. Due to this, the volume of trades has already started to decline. However, this does not mean that volatility is also declining. Next week we will have another powerful breakthrough in this respect: besides the release of important reports, 4 major world central banks (USA, Switzerland, UK and eurozone) will announce their decisions on monetary policies.

British reports will open the upcoming week (at the beginning of the European trading session): the British National Statistics Office will release data on industrial production and GDP for October. This report shows the aggregate economic data and will have a strong impact on the Bank of England's monetary policy decision (the BoE is set to meet on Thursday, December 15). GDP growth means an improvement in economic conditions, which makes it possible (with a corresponding increase in inflation) to tighten monetary policy, which, in turn, usually has a positive effect on the quotes of the national currency.

Monthly GDP data (as opposed to quarterly reports) does not affect the pound so much. Nevertheless, traders, who follow the dynamics of its quotes, are likely to pay attention to this report.

Indicators in the manufacturing industry and industrial production in the UK are expected to fall, and GDP growth will decrease, which should have a negative impact on the pound, including in the GBP/USD pair.

In the meantime, GBP/USD has been on an uptrend for the third consecutive month, having recovered from a deep fall in August and September. Back then, as we remember, the ill-conceived policy of the then Prime Minister Lisa Truss' cabinet to reduce taxes and increase spending led to a sharp drop in the market for British government bonds and the pound. Economists said that the British financial system was hours away from a grand collapse or just a collapse in general. The BoE had to intervene to prevent the pound and the British stock market from plunging even further: in late September, according to Bloomberg, the central bank purchased British government bonds (conventional gilts) with a residual maturity of more than 20 years in the secondary market from September 28, and promised to buy long-term government bonds worth another 65 billion pounds. "The purchases will be carried out on whatever scale is necessary," the BoE said at the time.

However, GBP/USD has also been rising in the last 3 months and amid the weakening U.S. dollar. The DXY index reached a local high of 114.74 in September (since June of 2002), but then started falling in November by more than 5.0%. And the DXY has fallen another 1.1% since early December, to its current high of 104.81. And so far, as we noted at the beginning of this article, the dollar and its DXY index remain under pressure.

This image is no longer relevant

As for GBP/USD, the pair was trading near 1.2240, bullish in the medium-term (above the support levels of 1.2110, 1.1930 and 1.1875) when this article was written. The uptrend is still present for the time being: steady growth to the area above the long-term resistance level of 1.2250.

Jurij Tolin,
Analytical expert of InstaTrade
© 2007-2025

Recommended Stories

USD/CHF. Analysis and Forecast

Today, Friday, USD/CHF is attracting new sellers amid the broader weakening of the U.S. dollar. The initial market reaction to Thursday's stronger-than-expected U.S. Producer Price Index was short-lived

Irina Yanina 13:46 2025-08-15 UTC+2

AUD/JPY. Analysis and Forecast

According to data released today by Japan's Cabinet Office, the Japanese economy grew by 1% year-on-year in the April–June period. This figure significantly exceeded analysts' expectations of 0.4% growth

Irina Yanina 12:47 2025-08-15 UTC+2

XAU/USD. Analysis and Forecast

Gold is attempting to recover its upward momentum, partially offsetting the previous day's losses, but the market remains uncertain about further movement. The U.S. dollar is exerting a favorable influence

Irina Yanina 12:42 2025-08-15 UTC+2

Gold Prices Drop Sharply

Yesterday, gold prices returned to a one-week low after traders reduced expectations for a Federal Reserve rate cut next month following an increase in inflation. The strengthening of the U.S

Jakub Novak 12:14 2025-08-15 UTC+2

U.S. Economy Remains Resilient

While the U.S. dollar is trying to hold on to the recent gains it secured from yesterday's strong U.S. inflation data, Richmond Federal Reserve Bank President Thomas Barkin said Thursday

Jakub Novak 12:06 2025-08-15 UTC+2

US Dollar Surged Sharply but Has Almost Lost All Its Gains

The US dollar rose sharply against a number of risk assets, but has since almost given back all of its gains. The rally came after news that the US Producer

Jakub Novak 11:39 2025-08-15 UTC+2

Market shrugs off PPI spike

Markets once again brushed off bad news. The S&P 500 managed to close higher, holding up against the hit from the Producer Price Index. On a monthly basis

Marek Petkovich 09:37 2025-08-15 UTC+2

Is the PPI Dynamics Useful for Markets? (Possible Resumption of Growth in Bitcoin and GBP/USD)

The producer inflation data released on Thursday unexpectedly had a noticeable, albeit limited, impact on financial markets. However, the shock was neither deep nor long-lasting. Let's try to understand

Pati Gani 09:13 2025-08-15 UTC+2

What to Pay Attention to on August 15? A Breakdown of Fundamental Events for Beginners

There are not many macroeconomic releases scheduled for Friday, but there will be some. In Germany, the UK, and the Eurozone, the event calendars are empty, but in the U.S

Paolo Greco 06:53 2025-08-15 UTC+2

GBP/USD Overview – August 15: Even the UK Economy Supports Growth

The GBP/USD currency pair spent most of Thursday moving sideways, but there is no reason to think the uptrend has ended. The pound sterling has been steadily rising since completing

Paolo Greco 03:50 2025-08-15 UTC+2
Can't speak right now?
Ask your question in the chat.
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaTrade anyway.

We are sorry for any inconvenience caused by this message.