- The British pound remains offered and is approaching 1.3650.
- Expectations of a rate hike from the BoE are pushing the pair higher.
- GBP / USD: A dip to 1.3163 / 58 is still on the cards – DBS Bank.
The pound it is poised for its fourth positive day in a row, extending its rebound from year-to-date lows near 1.3400 last week to session highs just below 1.3650 at the time of writing.
BoE rate hike expectations are driving demand for GBP
The pound has strengthened in recent days, to reduce the losses of the previous two weeks. Markets appear to have shifted focus from fuel shortages and supply disruptions in the UK to the possibility of the Bank of England leading the major central banks in raising interest rates.
On the macro front, UK service sector activity in September was revised up to 55.4 from preliminary estimates of 54.6. However, the price component rose to record levels, with new orders plummeting amid supply and personnel shortages that could dampen the sectors’ growth prospects.
GBP / USD: Further declines still likely to 1.3163 / 58 – DBS Bank
However, according to currency analysts at DBS Bank, they point to a triangle pattern that could send the British pound into the midrange of 1.3100: “The triangle may orient a probe toward the 38.2% Fibonacci retracement of the grip range of 1.1412-1.4248 (at 1.3158). In the same price zone, we have strong support in sight offered by the 200-week moving average of 1.3163 ”.
Technical levels
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