The Pound Sterling dipped slightly against the US Dollar after Trump reiterated his support for the dominance of the USD
FUNDAMENTAL OVERVIEW:
- The Pound Sterling weakened against the US Dollar on Monday after Donald Trump threatened to impose 100% tariffs on BRICS nations, bolstering the Greenback.
- Trump warned of tariffs if the group attempted to replace the US Dollar with its reserve currency.
- Technically, GBP/USD is still in an uptrend, currently experiencing a correction.
The Pound Sterling (GBP) pulled back on Monday after President-elect Donald Trump’s latest comments strengthened the US Dollar (USD).
In a social media post, Trump criticized the BRICS trading bloc’s proposal to replace the US Dollar with their currency. He warned that if the emerging-market group proceeds with the plan, he would impose 100% tariffs on them.
Despite this, the GBP/USD pair briefly recovered after the UK house price data release, which showed that property prices in November increased more than expected, providing support for the Pound.
The pair is declining after Donald Trump warned that he would impose 100% tariffs on the BRICS nations, which include Brazil, Russia, India, China, South Africa, Egypt, Iran, the United Arab Emirates, and Ethiopia. Trump stated that the tariffs would be enforced if the group planned to replace the US Dollar as its primary currency for transactions.
Regarding the outlook for interest rates, which is a key factor influencing currency valuations, the Pound Sterling and the US Dollar are closely aligned.
Both the Bank of England (BoE) and the US Federal Reserve (Fed) are expected to lower interest rates during their December policy meetings, as inflation continues to subside.
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GBP/USD TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
GBP/USD is trading within a down channel.
GBP/USD is moving below all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Neutral Zone, while the Stochastic oscillator suggests a Neutral trend.
Immediate Resistance level: 1.2748
Immediate support level: 1.2600
Daily Fundamental And Technical Analysis
HOW TO TRADE GBP/USD
GBP/USD experienced a sharp upward move but was halted by a strong resistance barrier. This led to a forceful price reversal, breaking through crucial support levels. The pair has now broken below its major support zone and is currently in a pullback phase, moving towards the resistance area. If prices are rejected at this resistance level, it could indicate a resumption of the downward trend.