GBP Anticipated to Test 1.2410: Insights from UOB Group’s FX Analysts
The Pound Sterling (GBP) is expected to test the resistance level of 1.2375, according to UOB Group’s FX strategists Quek Ser Leang and Lee Sue Ann. This prediction is based on the positive view held by the analysts regarding the British currency.
Positive Outlook for GBP
The bullish sentiment towards the GBP is driven by a few key factors. Firstly, the UK economy has shown signs of recovery following the pandemic-induced downturn. The country’s GDP grew by 6.6% in the third quarter of 2021, surpassing the pre-pandemic level. Additionally, the Bank of England (BoE) has indicated that it will begin reducing its asset purchase program in the coming months, suggesting a shift towards monetary tightening.
Resistance at 1.2410 Unlikely
Despite the positive outlook, the analysts do not anticipate the major resistance level at 1.2410 to come into view in the near term. This level was previously a significant support level for the GBP, but it has since been breached. As a result, it is now acting as a resistance level. However, the analysts believe that the upward momentum of the GBP is strong enough to overcome this resistance.
Impact on Individuals
For individuals holding GBP, this positive outlook is a welcome sign. A move towards 1.2410 would result in increased value for their holdings. However, it is important to note that currency markets are subject to volatility, and there are always risks involved in holding foreign currency. It is advisable to keep abreast of market developments and consider diversifying one’s portfolio.
Impact on the World
A stronger GBP can have implications for the global economy. A stronger British currency makes British exports more expensive, potentially reducing demand and impacting the country’s trade balance. However, it also makes imports cheaper, which can lead to increased consumer spending and stimulate economic growth. Additionally, a stronger GBP can put downward pressure on inflation, as imported goods become cheaper.
Conclusion
In conclusion, UOB Group’s FX strategists anticipate the Pound Sterling to test the resistance level of 1.2375, with the potential for further gains towards 1.2410. This positive outlook is driven by the UK’s economic recovery and the Bank of England’s monetary policy shift. While there are risks involved in holding foreign currency, a stronger GBP can have implications for both individuals and the global economy.
- GBP expected to test resistance level of 1.2375
- Positive outlook driven by UK economic recovery and BoE monetary policy shift
- Impact on individuals: potential for increased value of holdings
- Impact on the world: potential implications for trade balance, inflation, and consumer spending
