GBP/USD stays fragile and at mercy of dollar's market valuation

FXStreet Insights Team FXStreet

GBP/USD seems to have stabilized around 1.3500 early Wednesday. But in the view of FXStreet’s Eren Sengezer, it is too early to say that the pair has gone into a recovery phase.

Markets eye FOMC's January policy announcements

“If FOMC Chairman Jerome Powell notes that they could start shrinking the balance sheet in the second half of the year instead of ‘toward the end of the year’ this could have a bullish impact on the dollar and weigh on GBP/USD. On the other hand, Powell might adopt a cautious tone on policy tightening and cause the dollar to face renewed selling pressure. In that case, GBP/USD should extend its rebound, at least in the near-term.”

“On the downside, 1.3460 (200-period SMA, Fibonacci 50% of the latest uptrend) aligns as first support ahead of 1.3410 (Fibonacci 61.8% retracement).”

“Resistances are located at 1.3530 (Fibonacci 38.2% retracement) and 1.3580 (50-period SMA, 100-period SMA).”

See – Fed Preview: Forecasts from 14 major banks, building a March hike

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FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD appears supported by the 200-day SMA, for now

Following an early pullback to multi-week lows near 1.1670, EUR/USD now manages to reclaim the 1.1700 region as the NA session draws to a close on Monday. The steep retracement in spot follows the equally strong move higher in the US Dollar, as investors continue to assess the geopolitical landscape in the wake of the US and Israel attacks on Iran.

GBP/USD hits new yearly lows near 1.3300

GBP/USD adds to the recent bearish tone, approaching to the key 1.3300 support to reach fresh YTD troughs against the backdrop of the robust performance of the US Dollar. Indeed, Cable’s decline comes amid the firm demand for the safe-haven space in the wake of the US and Israel attacks to Iran.

Gold eases some ground, approaches $5,300

Gold now surrenders part of the earlier advance, reshifting its attenton to the $5,300 zone per troy ounce at the beginning of the week. Indeed, the yellow metal’s firm performance appears propped up by incresing geopolitical jitters in the Middle East, which at the same time fuels the demand for the safe-haven space.