The Pound Sterling (GBP) is stabilizing on Monday
The Pound Sterling (GBP) is stabilizing on Monday above 1.2800 after showing a big bullish performance last week, rallying to levels not seen since April 2022, above 1.2800. Investors are keeping an eye on the United Kingdom’s key inflation data, to be released on Wednesday at 6 GMT. The GBP/USD pair is showing a severe contraction in volatility to start the week, ahead of the release of key price indicators, which will provide guidance about the interest rate policy from the Bank of England (BoE).
Tight labor market conditions and higher food prices in the United Kingdom have remained major catalysts that have been keeping inflationary pressures elevated. More interest rate hikes by the UK central bank are widely expected as inflation has not shown yet evidence of coming down. The Pound Sterling has stabilized after printing a fresh 13-month high at 1.2848. The Cable is showing a lackluster performance but is expected to continue its four-day winning streak as the USD Index is facing pressure due to a shift in sentiment about Fed’s interest rate guidance. Horizontal support is plotted from the 26 May 2022 high at 1.2667, which will act as a cushion for the Pound Sterling. Sentiment for the GBP/USD pair will get more bullish if it manages to climb above a fresh 13-month high at 1.2848. The Pound Sterling could lose its strength if the Cable dropped below June’s low of around 1.2370.