Pound Rose On BoE Positive Comments, Soft U.S Dollar

Fundamental Analysis

* Sterling Spark: The British pound strengthened against the US dollar, buoyed by positive remarks from Bank of England officials and a decline in the dollar following the Federal Reserve’s recent interest rate decision. On U.S front, the Fed maintained its benchmark rate within a target range of 5.25%–5.50%. The Fed indicated it wouldn’t consider lowering rates until it was more confident about inflation reaching its 2% target sustainably. Fed Chair Jerome Powell remarked that a rate hike was unlikely in the near future. Meanwhile, BoE Chief Economist Huw Pill cautioned against moving too swiftly to cut interest rates, suggesting there may be more risk in doing so prematurely than delaying the decision. These statements provided some support for the British pound.

Technical Analysis

* Technical Breakout: USD/CAD was traded higher following prior rebound from the level 1.36650. MACD which illustrate ongoing bullish momentum signal suggest the pair to further extend its gains.

* Resistance and Targets: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 1.2585. Conversely, there’s a possibility of a technical correction causing the pair to retreat to the support level at 1.2465.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Moving ahead, Moving ahead, investors will primarily concentrate on economic data from the U.S. at the beginning of the new month to determine the next course of action. The absence of significant macroeconomic data releases from the U.K. this week might result in the pound trading without a distinct direction.

Know how to manage trading risks with risk management strategies.

Monitoring

Stay updated on US and U.K data, BoE related updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.