- GBP/USD is on a pullback after failing to break resistance at 1.2800.
- Business activity in the US portrays an upbeat economy, in contrast to the UK.
- From a technical standpoint, further downside is seen in the GBP/USD with a daily close below 1.2700.
GBP/USD falls in the mid-North American session after reaching a four-month high of 1.2793, losing 0.43%, slipping below the 1.2700 figure. At the time of writing, the major is trading at 1.2693.
A solid economic outlook in the US, could weigh on the GBP/USD in the future
The central bank bonanza ended with the Bank of England (BoE) and the Federal Reserve (Fed) holding rates unchanged but with different messages for market participants. The former struck a hawkish message as the BoE Governor Andrew Bailey said there is “still some way to go” in their inflation battle. Contrarily, Fed Chair Jerome Powell stated that monetary policy was sufficiently restrictive, and talk about rate cuts, began. That has been taken back by the New York Fed President John Williams, who said talks of March rate cuts is “premature.”
On the data front Industrial Production in the US was weaker than the 0.3% expected in November, came at 0.2%, but exceeded October’s -0.9% contraction. Later, business activity gathers momentum, revealed S&P Global in its Flash PMIs report. Even though the composite index was 51, exceeding November’s 50.7, it was boosted by the jump in the services sector, which expanded for the fourth straight month. Activity in manufacturing slipped the most in three months and remains in recessionary territory for the second month in a row.
On the UK front, business activity improved in December, except for manufacturing, which remained at recessionary territory since July 2022.
All that said, next week’s economic docket in the UK will feature inflation figures and retail sales. Across the pond, the week will kick in with housing data and consumer confidence until Wednesday. From Thursday onwards, the final GDP print, unemployment claims, Durable Goods Orders, and consumer sentiment.
GBP/USD Price Analysis: Technical outlook
Even though the GBP/USD is on a pullback, the uptrend remains intact. As of writing, sellers are testing a six-month-old downslope support trendline at around current levels, which if broken, would exacerbate a drop towards the 1.2500 figure. In that outcome, the first support would be the 1.2600 figure, followed by the confluence of the December 13 low and the 200-day moving average (DMA) at 1.2500/02. Otherwise, if buyers holds prices above 1.2700, a test of the 1.2800 is on the cards.
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 retreats from daily highs, holds above 1.0800
![EUR/USD retreats from daily highs, holds above 1.0800](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/money-59004818_XtraSmall.jpg)
EUR/USD loses traction but holds above 1.0800 after touching its highest level in three weeks above 1.0840. Nonfarm Payrolls in the US rose more than expected in June but downward revisions to May and April don't allow the USD to gather strength.
GBP/USD struggles to hold above 1.2800 after US jobs data
![GBP/USD struggles to hold above 1.2800 after US jobs data](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/british-banknotes-14144912_XtraSmall.jpg)
GBP/USD spiked above 1.2800 with the immediate reaction to the mixed US jobs report but retreated below this level. Nonfarm Payrolls in the US rose 206,000 in June. The Unemployment Rate ticked up to 4.1% and annual wage inflation declined to 3.9%.
Gold approaches $2,380 on robust NFP data
![Gold approaches $2,380 on robust NFP data](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/stack-of-golden-bars-in-the-bank-vault-60756080_XtraSmall.jpg)
Gold intensifies the bullish stance for the day, rising to the vicinity of the $2,380 region following the publication of the US labour market report for the month of June. The benchmark 10-year US Treasury bond yield stays deep in the red near 4.3%, helping XAU/USD push higher.
Crypto Today: Bitcoin, Ethereum and Ripple lose key support levels, extend declines on Friday
![Crypto Today: Bitcoin, Ethereum and Ripple lose key support levels, extend declines on Friday](https://editorial.fxstreet.com/images/Markets/Currencies/Digital%20Currencies/Bitcoin/Bitcoin_2_XtraSmall.jpg)
Crypto market lost nearly 6% in market capitalization, down to $2.121 trillion. Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) erased recent gains from 2024.
French Elections Preview: Euro to “sell the fact” on a hung parliament scenario Premium
![French Elections Preview: Euro to “sell the fact” on a hung parliament scenario](https://editorial.fxstreet.com/images/Macroeconomics/Countries/Europe/Eurozone_countries/France/pantheon-paris-with-french-flag-8748101_XtraSmall.jpg)
Investors expect Frances's second round of parliamentary elections to end with a hung parliament. Keeping extremists out of power is priced in and could result in profit-taking on Euro gains.