- GBP/USD climbs to a fresh weekly high on Thursday amid sustained USD selling bias.
- Dovish remarks by Fed Chair Powell, weaker US bond yields weigh on the greenback.
- The technical set-up favours bullish traders and supports prospects for further gains.
The GBP/USD pair builds on the previous day's goodish rebound from a one-week low and gains traction for the second successive day on Thursday. The pair maintains its bid tone through the first half of the European session and hits a fresh weekly high, around the 1.2130-1.2135 area in the last hour.
The overnight dovish-sounding remarks by Fed Chair Jerome Powell, along with a further decline in the US Treasury bond yields, keep the US Dollar bulls on the defensive near a multi-month low. Apart from this, a generally positive tone around the equity markets is seen undermining the safe-haven buck and acting as a tailwind for the GBP/USD pair.
From a technical perspective, spot prices have now moved well within the striking distance of the very important 200-day SMA. The said barrier is currently pegged near the 1.2150 area, which if cleared will be seen as a fresh trigger for bullish traders and set the stage for an extension of the near-term appreciating move for the GBP/USD pair.
Given that oscillators on the daily chart are holding in the bullish territory and are still far from being in the overbought zone, the GBP/USD pair might then aim to reclaim the 1.2200 mark. The momentum could further get extended and lift spot prices to the top boundary of over a two-month-old ascending channel, currently around the 1.2300 round figure.
On the flip side, any meaningful pullback below the 1.2100 mark now seems to find decent support near the daily low, around the 1.2045 region. A convincing break below might prompt some technical selling and drag the GBP/USD pair back toward the 1.2000 psychological mark. Some follow-through selling will expose the 1.1945-1.1940 horizontal support.
The latter should act as a strong base for spot prices, which if broken decisively will negate any near-term positive bias and pave the way for a deeper corrective decline. The GBP/USD pair might then turn vulnerable to weaken further below the 1.1900 mark and test the next relevant support near the 1.1860-1.1855 horizontal zone.
GBP/USD daily 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 stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
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.