Connect with us

Hi, what are you looking for?


Rolls-Royce share price analysis as pound sterling crashes

Rolls-Royce (LON: RR) share price popped by more than 3.3% on Monday as the GBP/USD price plummeted to a record low. It was trading at 74.32p, which was slightly above the year-to-date low of 69.75p. 

Weak sterling as a catalyst

Rolls-Royce Group is one of the biggest industrial and manufacturing companies in the UK. The firm manufactures products in industries like aviation, energy, and defense. It has operations in the UK and other countries like the UK.

A major theme in the UK since Friday has been the tax cuts implemented by Lizz Truss and her administration. As a key industrial company in the UK, these tax cuts will have a positive impact on its profitability.

Another potential catalyst for Rolls-Royce Holdings is the weaker British pound since the company usually does most of its business in US dollar. For example, it has huge manufacturing locations in the United States, where it has over 6,000 customers.

Rolls-Royce’s servicing business is made using US dollars. For starters, this is the most important segment for the company since it generates more than 50% of its revenue in its civil aviation industry.

The GBP/USD pair has crashed to an all-time low as confidence in the UK economy worsened. Therefore, as described above, there is a likelihood that the firm will benefit because of the weaker pound. As a UK company, it reports its financial results in pounds, meaning that its dollar income will be much higher.

Still, the company faces numerous challenges ahead. For example, with interest rates rising, there is a likelihood that the firm will spend more money servicing its debt. It added billions of dollars in debt during the pandemic as it fought for survival.

Rolls-Royce share price forecast

The daily chart shows that the RR share price has been in a strong bearish trend in the past few months. It has crashed by 50% from the highest level in 2021. The stock has formed a descending triangle pattern that is shown in purple. Also, it has moved below all moving averages while the MACD has moved below the neutral level.

Therefore, the stock will likely continue falling as recession risks continue. If this happens, the next key support level to watch will be at 60p. A move above the resistance level at 77p will invalidate the bearish view.

The post Rolls-Royce share price analysis as pound sterling crashes appeared first on Invezz.

Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like


    Reprinted from the Future of Freedom Foundation President Biden’s campaign to banish (or maybe outlaw) political paranoia took a wallop last spring. In April,...


    Inflation appears to be on the decline. The Personal Consumption Expenditures Price Index (PCEPI), which is the Federal Reserve’s preferred measure of inflation, grew...

    Editor's Pick

    It’s already a cliché, but technology is rapidly improving. And for many businesses, it’s hard to catch up. However, it’s not just the average...

    Editor's Pick

    At Broadband World Forum 2022, Fibocom launched 5G module FG370 based on MediaTek T830 platform, aiming to empower the deployment of 5G FWA for...

    Disclaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2022 All Rights Reserved.