Introduction
The foreign exchange market is one of the most dynamic and volatile markets in the world, with prices fluctuating constantly based on a variety of economic, political, and social factors. The GBP/USD currency pair is one of the most actively traded pairs in the market, and economists at UOB Group believe that it is poised for upward momentum in the near future.
Rephrasing the Content
According to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, the GBP/USD currency pair is expected to gain momentum once it clears the 1.2550 level. This means that the pound sterling is likely to appreciate against the US dollar, making it a potentially profitable investment for traders and investors.
Factors Driving GBP/USD Momentum
There are several factors that could contribute to the anticipated upward momentum in the GBP/USD currency pair. One of the most significant factors is the ongoing Brexit negotiations between the UK and the European Union. As the negotiations progress, there is a growing sense of optimism that a deal will be reached that is favorable to both parties. This could help to strengthen the pound sterling, as it would provide greater certainty and stability for the UK economy.
Another factor that could contribute to the GBP/USD momentum is the recent weakening of the US dollar. The US dollar has been under pressure in recent months due to concerns about the US economy, rising inflation, and geopolitical tensions. This has led many investors to shift their focus to other currencies, such as the pound sterling, which are seen as more stable and reliable.
Technical Analysis of GBP/USD
In addition to the fundamental factors driving GBP/USD momentum, there are also several technical indicators that suggest the currency pair is poised for an upward trend. According to UOB Group economists, the GBP/USD has been trading in a bullish channel since late March, which suggests that there is strong upward momentum building.
Furthermore, the currency pair has recently broken above its 50-day moving average, which is another bullish indicator. This means that the pound sterling is trading above its average price over the past 50 days, which is a positive sign for investors and traders.
Conclusion
In conclusion, the GBP/USD currency pair is expected to gain momentum in the near future, according to economists at UOB Group. This is based on a combination of fundamental factors, such as the ongoing Brexit negotiations and the weakening of the US dollar, as well as technical indicators that suggest upward momentum is building. Investors and traders who are looking to take advantage of this trend may want to consider opening long positions on the pound sterling, with a target price above 1.2550.
