GBP/USD sticks to modest intraday gains around mid-1.2200s, lacks follow-through


  • GBP/USD regains positive traction on Monday and recovers a part of Friday’s modest losses.
  • Rising US bond yields act as a tailwind for the USD and keep a lid on any meaningful upside.
  • Traders now look to BoE Governor Bailey’s scheduled speech for short-term opportunities.

The GBP/USD pair builds on Friday's late intraday rebound from sub-1.2200 levels and gains some positive traction on the first day of a new week. The pair maintains its bid tone through the early part of the European session and is currently trading around mid-1.2200s, up nearly 0.15% for the day.

A further recovery in the US Treasury bond yields is seen lending some support to the US Dollar (USD) and turning out to be a key factor acting as a headwind for the GBP/USD pair. That said, the Federal Reserve's signal that it might soon pause the rate-hiking cycle in the wake of the recent turmoil in the banking sector should cap any meaningful upside for the US bond yields. Apart from this, a generally positive risk tone - as depicted by a fresh leg up in the US equity futures - keeps a lid on any the safe-haven Greenback and remains supportive of the bid tone surrounding the major.

News that First Citizens Bank & Trust Company will buy all of Silicon Valley Bank's deposits and loans from the Federal Deposit Insurance Corporation (FDIC) calmed market nerves about the contagion risk and boost investors' confidence. Traders, however, remain worried about a full-blown banking crisis. In fact, International Monetary Fund (IMF) Chief Kristalina Georgieva warned over the weekend that risks to financial stability have increased. This, along with Russia's decision to shift nuclear weapons near Belarus, continues to keep a lid on any optimism in the markets.

In the absence of any relevant economic data, either from the UK or the US, the aforementioned mixed fundamental backdrop warrants some caution for aggressive traders and before placing fresh directional bets around the GBP/USD pair. That said, the Bank of England (BoE) Governor Andrew Bailey's scheduled speech later during the US session might influence the British Pound and provide some meaningful impetus to the major. Meanwhile, the focus will remain glued to the release of the US Core PCE Price Index - the Fed's preferred inflation gauge - due on Friday.

From a technical perspective the pair is rangebound in the short term, with a cieling likely to provide resistance at 1.2435 and a floor to give support at circa 1.1790. GBP/USD is currently in an upleg within the range. A break above the 1.2345 level will probably signal a continuation up to the cieling.

Alternatively a break below the 1.2175 swing low of March 21 would probably indicate the start of a downleg, potentially back all the way to the range floor. The trend prior to the formation of the sideways consolidation was bullish, indicating a slightly higher chance of a breakout higher. The Chaikin Money Flow oscillator is used by technical analysts to provide an insight into the likely direction for a range breakout, however, on GBP/USD it is giving mixed messages. 

Technical levels to watch

GBP/USD

Overview
Today last price 1.2253
Today Daily Change 0.0020
Today Daily Change % 0.16
Today daily open 1.2233
 
Trends
Daily SMA20 1.2085
Daily SMA50 1.2148
Daily SMA100 1.2093
Daily SMA200 1.1893
 
Levels
Previous Daily High 1.2292
Previous Daily Low 1.2191
Previous Weekly High 1.2344
Previous Weekly Low 1.2167
Previous Monthly High 1.2402
Previous Monthly Low 1.1915
Daily Fibonacci 38.2% 1.223
Daily Fibonacci 61.8% 1.2253
Daily Pivot Point S1 1.2185
Daily Pivot Point S2 1.2137
Daily Pivot Point S3 1.2083
Daily Pivot Point R1 1.2287
Daily Pivot Point R2 1.234
Daily Pivot Point R3 1.2388

 

 

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD stays pressured toward 1.0500, US PPI data next in focus

EUR/USD stays pressured toward 1.0500, US PPI data next in focus

EUR/USD remains heavy toward 1.0500 in the European session on Thursday, hanging at yearly lows. The Trump trades-driven unabated US Dollar demand and tarrifs threat weigh on the pair. Mixed Eurozone data fail to lift the Euro. Eyes turn to US PPI data and Fed Chair Powell. 

EUR/USD News
GBP/USD holds losses near 1.2650 on relentless US Dollar buying

GBP/USD holds losses near 1.2650 on relentless US Dollar buying

GBP/USD is holding losses while flirting with multi-month lows near 1.2650 in European trading on Thursday. The pair remains vulnerable amid a broadly firmer US Dollar and softer risk tone even as BoE policymakers stick to a cautious stance on policy. Speeches from Powell and Bailey are eyed. 

GBP/USD News
Gold price approaches 100-day SMA/50% Fibo. confluence amid sustained USD buying

Gold price approaches 100-day SMA/50% Fibo. confluence amid sustained USD buying

Gold price touches its lowest level since September 19, around $2,550 area during the early part of the European session on Thursday. The US Dollar buying remains unabated in the wake of optimism over the expected expansionary policies by US President-elect Donald Trump.

Gold News
XRP struggles near $0.7440, could still sustain rally after Robinhood listing

XRP struggles near $0.7440, could still sustain rally after Robinhood listing

Ripple's XRP is trading near $0.6900, down nearly 3% on Wednesday, as declining open interest could extend its price correction. However, other on-chain metrics point to a long-term bullish setup.

Read more
Trump vs CPI

Trump vs CPI

US CPI for October was exactly in line with expectations. The headline rate of CPI rose to 2.6% YoY from 2.4% YoY in September. The core rate remained steady at 3.3%. The detail of the report shows that the shelter index rose by 0.4% on the month, which accounted for 50% of the increase in all items on a monthly basis. 

Read more
Best Forex Brokers with Low Spreads

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.

Read More

Forex MAJORS

Cryptocurrencies

Signatures