Analysis of the trend of the pound against the dollar, short-term bearish but long-term still too much

During the market trading session on Wednesday, the pound against the dollar showed a volatile downward trend, trading around 1.3445, down about 0.25%. On the basis of giving back the previous trading day's gains, the price slightly fell below yesterday's low. Affected by the news of the Fed's internal policy differences, the overall trend of the dollar stabilized, and the pound against the dollar entered a short-term bearish pattern. The dollar index rose slightly to around 98.60, up about 0.40%.

Market experts say the US dollar's status could be threatened by news of divergent views on policy at the US Federal Reserve and legal challenges from some officials.

If more advocates of easing policy join the interest rate setting committee in the future, it may further strengthen market expectations for interest rate cuts.

Sterling remains stable on hawkish comments from Bank of England officials

The overall movement of the pound exchange rate was relatively stable on the day. Although Catherine Mann, a member of the Bank of England's monetary policy committee, said that in the current environment of persistently high inflation, interest rates should be kept unchanged for a longer time until downside risks to the economy became clear, the market reaction was relatively calm.yingshiAnalysts believe that this hawkish stance has provided some support for the pound in the short term.

Inflation data in the UK have accelerated over the past three months, showing consumer prices rose 3.8 per cent year-on-year in July, the highest level in recent memory.

At its recent policy meeting, the Bank of England decided by a narrow majority to cut interest rates by 25 basis points to 4%, and guided a gradual and prudent path of monetary policy easing in the future.

Looking ahead, the trend of the pound against the dollar will be affected by the upcoming US personal consumption expenditure price index data. The market generally expects that the year-on-year growth rate of core inflation will pick up. The earnings data suggest that this data is an important reference for the market to judge the future policy direction of the Federal Reserve.

technical analysis

From a technical perspective, the GBP/USD pair has been suppressed by the downward trend line recently, and has shown a bearish pattern in the short term. The key support area below is located near the August low.

On the upside, as GBP/USD is still above the long-term moving average, the overall bullish momentum for the currency pair in the long term remains. The area near the previous high will be an important resistance level.

In addition, technical indicators show that the relative strength index fluctuates in the middle area, indicating that market volatility has converged and may continue to fluctuate in the short term.

(Daily chart of GBP/USD)

At 17:18 Beijing time, the pound was trading in the 1.3444/45 range against the dollar.