GBP/USD retreats from key resistance level as UK GDP looms
|- GBP/USD retreats slightly after failing to breach the 200-day moving average, stabilizing near the 1.2370 mark.
- The US Dollar faced a significant drop following a less hawkish stance from Fed Chair Jerome Powell and a softer-than-expected Nonfarm Payrolls report, fueling speculation of an end to rate hikes.
- In the UK, attention turns to the upcoming Q3 GDP data, which is anticipated to show a contraction, highlighting economic challenges.
GBP/USD clings to earlier gains, though it remains trading below the 1.2400 figure after testing the 200-day moving average (DMA) at 1.2433, but failure to clear it, exacerbated a pullback toward the 1.2370 area, almost flat.
British Pound sees a pullback from the 200-DMA as market mood lifts, but central bank policies keep traders cautious
Equities in the United States (US) portray an upbeat market mood, as participants expect most global central banks to end their tightening cycle. Particularly the US Federal Reserve (Fed), which held rates unchanged and kept the door open for additional tightening. However, Fed Chairman Jerome Powell failed to deliver hawkish comments after the US central bank decision pressured the Greenback, which tumbled more than 1.40% last week.
Last Friday’s soft US jobs report increased the odds for the Fed done with rate hikes, as the economy added 150K jobs in October, revealed the US Nonfarm Payrolls report delivered by the Bureau of Labor Statistics (BLS). That, along with weak PMI readings, reignited fears the economy could hit a recession despite “soft landing” talks across Federal Reserve officials.
On the UK front, the docket will feature GDP for Q3, with most economists expecting a negative reading as companies cut expenses on dented demand. Recently, the Bank of England’s (BoE) Chief Economist Huw Pill commented they might be able to reconsider its stance on interest rates. He spoke during an online presentation organized by the BoE.
GBP/USD Technical Levels
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