Interest rate differentials will dominate sentiment | 03 December 2021

03 December 2021, GBP/USD

GBPUSD trading plan:

Interest rate differentials will dominate sentiment in forex markets over the next twelve months. Typically, on average, the dollar has gone up by four percentage points in broad index terms in the six months before the first Fed hike, and that's probably not an unreasonable projection for thinking about how much upside there could be for the dollar this time around. Trillions of dollars of Fed bond purchases are about to come to an end, inflation is the highest in decades due to global supply chain bottlenecks, the economy is running hot and the Fed is preparing the ground for lift-off on rates.

Investment idea: sell 1.3351 and take profit 1.3265.

David Johnson
Analyst of «FreshForex» company
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