The British pound continues to strengthen against the US dollar on Tuesday, retreating further from the local low of 1.1926. At the moment the pair is trading at 1.2080, waiting for new triggers.
Analysts note that the upward momentum of GBP/USD was formed only on technical factors, as the fundamental background is still putting pressure on the British currency.
The strengthening of the US dollar across the whole market is the main driver of the pair's decline. Positions of the dollar are supported by the national statistics and expectations of a decisive tightening of the monetary policy of the Federal Reserve System, due to the fight against inflation.
Investors were slightly disappointed by the data on durable goods orders in the U.S., published the previous day. The index fell by 4.5% in January, though if we take out defense and aircraft orders the picture turned out to be quite the opposite. The index rose 0.8% (m/m), which is a five-month record.
At the moment the market is actively discussing the topic of the Fed's monetary restriction in March. Some investors believe, and not without reason, that the regulator will raise the rate by 50 basis points at once.
Today the speeches of the members of the Governing Council of the Bank of England will be held, if they will not support a local growth of sterling, the pair before the end of the day will go back to the decrease.
I propose to place forex order to sell GBP/USD
- Sell-stop 1.2050
- Take-profit 1.1900
- Stop-loss 1.2100