GBP/USD eases from daily peak, up a little below mid-1.2400s ahead of Fed’s Powell


  • GBP/USD stages a goodish recovery from over a three-week low amid a modest USD pullback.
  • Hawkish Fed expectations and the US debt ceiling optimism should help limit the USD losses.
  • Traders also seem reluctant to place fresh directional bets ahead of Fed Chair Powell’s speech.

The GBP/USD pair shows some resilience below the 50-day Simple Moving Average (SMA) on Friday and stages a solid bounce from sub-1.2400 levels, or over a three-week low touched the previous day. The pair, however, retreats a few pips from the daily high touched during the early North American session and currently trades around the 1.2435-1.2445 region, up nearly 0.25% for the day.

The risk-on impulse - as depicted by a generally positive tone around the equity markets - prompts some profit-taking around the safe-haven US Dollar (USD), especially after the recent runup to a nearly two-month high. This, in turn, is seen as a key factor lending support to the GBP/USD pair, though the upside potential seems limited. Firming expectations that the Federal Reserve (Fed) will keep interest rates higher for longer, along with the latest optimism over the US debt ceiling deal, continue to push the US Treasury bond yields higher and favour the USD bulls.

In fact, a slew of Fed officials this week expressed concerns that inflation in the United States (US) was not cooling fast enough and forced investors to scale back their bets for interest rate cuts later this year. In fact, the current market pricing indicates a small chance of another 25 bps lift-off at the next FOMC policy meeting in June. Furthermore, top US congressional Republican Kevin McCarthy said on Thursday that negotiations are at a better place than last week and expected a bill to raise the government's $31.4 trillion debt ceiling on the House floor next week.

The aforementioned fundamental backdrop might hold back traders from placing aggressive bearish bets around the Greenback. Apart from this, expectations that fewer rate increases by the Bank of England (BoE) will be needed in the coming months to bring down inflation further contributes to capping gains for the GBP/USD pair. Investors also prefer to wait on the sidelines ahead of Fed Chair Jerome Powell's speech, which might provide clues about future rate hikes. This will drive the near-term USD price dynamics and provide a fresh directional impetus to the major.

Technical levels to watch

GBP/USD

Overview
Today last price 1.2436
Today Daily Change 0.0027
Today Daily Change % 0.22
Today daily open 1.2409
 
Trends
Daily SMA20 1.2517
Daily SMA50 1.2403
Daily SMA100 1.2266
Daily SMA200 1.1967
 
Levels
Previous Daily High 1.2493
Previous Daily Low 1.2392
Previous Weekly High 1.268
Previous Weekly Low 1.244
Previous Monthly High 1.2584
Previous Monthly Low 1.2275
Daily Fibonacci 38.2% 1.243
Daily Fibonacci 61.8% 1.2454
Daily Pivot Point S1 1.2369
Daily Pivot Point S2 1.233
Daily Pivot Point S3 1.2268
Daily Pivot Point R1 1.2471
Daily Pivot Point R2 1.2533
Daily Pivot Point R3 1.2572

 

 

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD stays below 1.1100, looks to post weekly losses

EUR/USD stays below 1.1100, looks to post weekly losses

EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.

EUR/USD News
GBP/USD struggles to find a foothold, trades near 1.3150

GBP/USD struggles to find a foothold, trades near 1.3150

GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.

GBP/USD News
Gold retreats toward $2,500 ahead of the weekend

Gold retreats toward $2,500 ahead of the weekend

Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.

Gold News
Week ahead – Investors brace for NFP amid Fed rate cut speculation

Week ahead – Investors brace for NFP amid Fed rate cut speculation

Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.

Read more
Easing Eurozone inflation to back an ECB rate cut in September

Easing Eurozone inflation to back an ECB rate cut in September Premium

Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Forex MAJORS

Cryptocurrencies

Signatures