- GBP/USD attracts fresh sellers on Friday, though the downside remains cushioned.
- Traders now seem reluctant to place aggressive directional bets ahead of the US PCE.
- The technical setup suggests that the path of least resistance remains to the downside.
The GBP/USD pair extends the overnight late pullback from the 1.2670 region and trades with a mild negative bias during the Asian session on Friday. Spot prices currently hover around the 1.2635-1.2630 area and remain well within the striking distance of the lowest level since mid-May touched on Thursday.
The British Pound (GBP) continues to be undermined by rising bets for a rate cut by the Bank of England (BoE) in August. Apart from this, some repositioning trade ahead of the crucial US inflation data lifts the US Dollar (USD) to a fresh two-month high, which, in turn, is seen as another factor exerting some downward pressure on the GBP/USD pair. That said, the uncertainty about the Federal Reserve's (Fed) rate-cut path keeps a lid on any further gains for the buck and helps limit the downside for the currency pair.
From a technical perspective, the emergence of fresh selling and acceptance below the 1.2650-1.2645 confluence – comprising 50-day and 100-day Simple Moving Averages (SMAs) – favors bearish traders. Moreover, oscillators on the daily chart have been gaining negative traction and suggest that the path of least resistance for the GBP/USD pair is to the downside. That said, any subsequent slide is likely to find some support near the weekly low, around the 1.2615-1.2610 area, ahead of the 1.2600 mark, which if broken will set the stage for deeper losses.
The GBP/USD pair might then accelerate the downfall towards challenging the very important 200-day SMA, currently pegged near the 1.2560 region en route to the 1.2500 psychological mark. The downward trajectory could extend further towards testing the May monthly swing low, around the 1.2445 area.
On the flip side, the 1.2670 area, or the overnight peak, now seems to act as an immediate hurdle ahead of the 1.2700 round-figure mark. A sustained strength beyond the latter will suggest that the recent corrective decline has run its course and lift the GBP/USD pair beyond the 1.2720-1.2725 supply zone, towards the 1.2800 mark. Bullish traders might then aim back towards challenging the multi-month top, around the 1.2860 region touched on June 12, and lift spot prices further towards the 1.2900 round-figure mark.
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.