Should We Be Wary of Whether the Rising Pound Will Continue to Gain Ground?

Should We Be Wary of Whether the Rising Pound Will Continue to Gain Ground?

13.03.2023

Last weekend, the U.S. dollar fell sharply following the release of the February employment report, which showed a slight rise in the unemployment rate and a slowdown in average wage growth. The EUR/USD pair rose by about 120 pips from 1.0573 to 1.0699, breaking back above the 20-day moving average on the daily chart.The EUR/USD pair has continued to rise during today’s Asian trading session, already touching 1.0736. We will need to carefully assess whether the U.S. dollar’s strength will carry over into the U.S. trading session.

Among European currencies, the pound strengthened against the U.S. dollar, with GBP/USD rising by approximately 200 pips. GBP/USD climbed from 1.1906 to 1.2113. An uptrend has formed, with the 10-period moving average (MA) on the hourly chart serving as a support line.On the higher-time-frame 4-hour chart, the pair broke above the 200-period SMA and also broke through the resistance zone at the recent high. Following last weekend’s rally, the pair entered a range-bound market on the daily chart, with a lower bound of 1.1802 and an upper bound of 1.2407. It will be worth watching whether the pound continues to strengthen after a period of consolidation.

Today, during European trading hours, Turkey’s current account balance will be released at 16:00, followed by India’s Consumer Price Index and Mexico’s industrial production at 21:00; during U.S. trading hours, the U.S. Employment Trends Index will be released at 23:00, followed by the U.S. 6-month Treasury bill auction at 24:30;at 27:05, remarks by UK MPC member Dingra; and at 30:00, South Korea’s export price inflation rate and import price inflation rate. I’d like to carefully monitor price movements during U.S. trading hours to see if the pound’s current upward trend will continue.