The GBP/USD pairing is made up of the British pound and the US dollar. The two currencies are heavily traded around the world, with a combined value of more than $5 trillion. The pairing is often affected by global economic news and events.
The British pound is considered a “major” currency, while the US dollar is considered a “reserve” currency. This means that traders often view movements in the GBP/USD pair as indicators of broader market sentiment.
For example, if investors are bullish on stocks, they may buy into USD-denominated assets like Treasuries or corporate bonds. This would push up demand for USD and put downward pressure on GBP/USD exchange rate .
Conversely, if investors are bearish on stocks, they may sell their USD-based holdings and buy into assets denominated in other currencies like euros or yen . In this case, we would see demand for EUR or JPY increase while demand for GBP decreases , leading to a appreciation (or depreciation) in those respective currency pairs against USD.
Today’s technical analysis on this currency pair-
- We are trading at oversold extremes.
- Buying pressure from 1.21000 resulted in prices rejecting the dip.
- The hourly chart technicals suggests further downside before the uptrend returns.
- Preferred trade is to buy on dips
Buy/Buy limit @ 1.21200 Take Profit: 1.22200
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