- GBP/USD attracts some dip-buying on Thursday and turns positive for the third straight day.
- Retreating US bond yields undermine the safe-haven USD and lend support to the major.
- Bets for a 25 bps BoE rate hike in May act as a tailwind for the GBP and remain supportive.
The GBP/USD pair reverses an intraday dip to the 1.2400 round-figure mark and turns positive for the third successive day on Thursday. The pair, however, remain below the weekly high touched on Wednesday and trades around the 1.2450-1.2455 region, just below the weekly high touched on Wednesday.
The US Treasury bond yields stall the recent strong rally to a nearly one-month high, which, along with the disappointing US macro data, exerts some pressure on the US Dollar (USD). Apart from this, rising bets for another 25 bps rate hike by the Bank of England (BoE) in May underpin the British Pound and act as a tailwind for the GBP/USD pair.
That said, the prospects for further policy tightening by the Federal Reserve (Fed) should help limit the downside for the US bond yields. Furthermore, the risk-off impulse - as depicted by a generally weaker tone around the equity markets - could revive demand for the safe-haven Greenback and keep a lid on any meaningful gains for the GBP/USD pair.
From a technical perspective, spot prices this week found a decent support near the 1.2355-1.2350 region. The said area should now act as a pivotal point, which if broken might prompt some technical selling. The GBP/USD pair could then slide to the 1.2300 mark en route to the 100-day Simple Moving Average (SMA), just below the 1.2200 round figure.
On the flip side, bulls might wait for some follow-through buying beyond the overnight swing high, around the 1.2470-1.2475 region, before placing fresh bets. The GBP/USD pair might then surpass the 1.2500 psychological mark and then aim back to retesting the monthly swing high, around the 1.2545 region touched last week.
The momentum could get extended towards the 1.2600 round figure, above which spot prices could climb to the next relevant hurdle near the 1.2660-1.2665 region.
GBP/USD 4-hour chart
Key levels to watch
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 extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
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.