GBP/USD Fundamental analysis.

[Nancy parez]

GBP/USD remains in a multi-month bearish trend and some analysts say it could eventually move as low as the 200-week moving average located at 1.3165 on Friday, although much will depend over the coming days on the data due this week in addition to the continuation of the sharp bullish trend for the dollar lately.

The US dollar has strengthened significantly after inflation data last week sent prices up the entire market - a 0.25% increase in the fed funds rate range for both the third and last quarters of 2022, as market pricing also suggests equivalent price moves are likely in 2023. However, the 2023 price steps have not yet been fully priced in, so there is still room for the market to bet more on this possibility. In addition to a rate hike in interest rates in 2024 in part because it was as recently as June in 2019, the maximum fed funds rate range of 25 basis points is set at 2.5%.