GBP/USD has been on the back foot, struggling to hold onto 1.37. Its weakness is exposed as the pound is poorly positioned ahead of an expected dovish speech by Fed Chair Powell, FXStreet’s Analyst Yohay Elam briefs.
See – GBP/USD: The 1.40 level is out of sight – Rabobank
Pound technicals and fundamentals point lower
“There are several reasons for sterling's suffering. UK COVID-19 cases have extended their increase, topping 38,000 in Thursday's report. Another issue is Brexit-related – shortages in some supermarkets due to the inability of companies to find lorry drivers and also butchers. The third factor comes from the terror attacks in Afghanistan. The dollar is benefiting from safe-haven flows – and these are more pronounced against the pound.”
“To taper or not to taper? Fed Chair Powell will probably opt to delay any announcement. He will likely be able to hold back the vocal hawks for a bit longer. Ahead of his speech, the US releases the Core PCE inflation figure which is set to show a modest uptick from 3.5% to 3.6% YoY.”
“GBP/USD has been unable to reconquer the 50 Simple Moving Average on the four-hour chart, a development that exacerbates downside momentum and the fact that it earlier failed to top the critical 1.3785 resistance line.”
“Support awaits at the daily low of 1.3680, followed by 1.3635 and then by 1.36, August's trough.”
“Resistance is at 1.3750, which capped a recovery attempt early in the week, and then by the almighty 1.3785 line.”
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
EUR/USD stays pressured toward 1.0500, US PPI data next in focus
EUR/USD remains heavy toward 1.0500 in the European session on Thursday, hanging at yearly lows. The Trump trades-driven unabated US Dollar demand and tarrifs threat weigh on the pair. Mixed Eurozone data fail to lift the Euro. Eyes turn to US PPI data and Fed Chair Powell.
GBP/USD holds losses near 1.2650 on relentless US Dollar buying
GBP/USD is holding losses while flirting with multi-month lows near 1.2650 in European trading on Thursday. The pair remains vulnerable amid a broadly firmer US Dollar and softer risk tone even as BoE policymakers stick to a cautious stance on policy. Speeches from Powell and Bailey are eyed.
Gold price approaches 100-day SMA/50% Fibo. confluence amid sustained USD buying
Gold price touches its lowest level since September 19, around $2,550 area during the early part of the European session on Thursday. The US Dollar buying remains unabated in the wake of optimism over the expected expansionary policies by US President-elect Donald Trump.
XRP struggles near $0.7440, could still sustain rally after Robinhood listing
Ripple's XRP is trading near $0.6900, down nearly 3% on Wednesday, as declining open interest could extend its price correction. However, other on-chain metrics point to a long-term bullish setup.
Trump vs CPI
US CPI for October was exactly in line with expectations. The headline rate of CPI rose to 2.6% YoY from 2.4% YoY in September. The core rate remained steady at 3.3%. The detail of the report shows that the shelter index rose by 0.4% on the month, which accounted for 50% of the increase in all items on a monthly basis.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.