- GBP/USD has gone into a consolidation phase after testing 1.3600.
- The pair stays inversely correlated with the 10-year US T-bond yield.
- Near-term resistance seems to have formed at 1.3650.
GBP/USD has managed to stage a technical correction after pushing lower earlier in the week and seems to have gone into a consolidation phase above 1.3600. The near-term technical outlook doesn't yet point to a buildup of bullish momentum and the pair could come under renewed selling pressure if buyers fail to defend 1.3600.
The British pound struggled to capitalize on the hot inflation data from the UK on Wednesday but gained traction ahead of the American session as retreating US Treasury bond yields caused the greenback to lose interest. This action confirms the view that the dollar's valuation remains the primary driver of the pair.
The benchmark 10-year US T-bond yield is down 1% early Thursday, forcing the US Dollar Index to stay under bearish pressure near 95.50 and allowing GBP/USD to cling to modest daily gains.
In the second half of the day, the US Department of Labor's weekly Initial Jobless Claims data and the Federal Reserve Bank of Philadelphia's Manufacturing Survey will be featured in the US economic docket. The S&P 500 Futures, which was up more than 0.5% earlier in the day, was last seen rising 0.3% on the day. In case Wall Street's main indexes continue to push lower after the opening bell, we could see the dollar regather its strength. On the other hand, GBP/USD could benefit from the risk-positive market environment if US stocks rebound in a convincing way.
GBP/USD Technical Analysis
Interim resistance for GBP/USD seems to have formed at 1.3650, where the 50-period SMA on the four-hour chart is located. The pair needs to rise above that level and start using it as support to attract bulls. 1.3680 (static level) and 1.3700 (psychological level, broken ascending trendline coming from December) align as the next hurdles.
On the downside, the 100-period SMA forms dynamic support a little below 1.3600. Fibonacci 23.6% retracement level of the one-month uptrend is also reinforcing that level. If we see a four-hour candle close below that support, the next bearish target could be seen at 1.3530 (Fibonacci 38.2% retracement).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
AUD/USD: The hunt for the 0.7000 hurdle
AUD/USD quickly left behind Wednesday’s strong pullback and rose markedly past the 0.6900 barrier on Thursday, boosted by news of fresh stimulus in China as well as renewed weakness in the US Dollar.
EUR/USD refocuses its attention to 1.1200 and above
Rising appetite for the risk-associated assets, the offered stance in the Greenback and Chinese stimulus all contributed to the resurgence of the upside momentum in EUR/USD, which managed to retest the 1.1190 zone on Thursday.
Gold holding at higher ground at around $2,670
Gold breaks to new high of $2,673 on Thursday. Falling interest rates globally, intensifying geopolitical conflicts and heightened Fed easing bets are the main factors.
Bitcoin displays bullish signals amid supportive macroeconomic developments and growing institutional demand
Bitcoin (BTC) trades slightly up, around $64,000 on Thursday, following a rejection from the upper consolidation level of $64,700 the previous day. BTC’s price has been consolidating between $62,000 and $64,700 for the past week.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.