GBP/USD Forecast: Pound Sterling struggles to gather recovery momentum
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UPGRADE- GBP/USD stabilized above 1.2100 in the European session on Friday.
- The pair's near-term technical outlook points to a lack of directional momentum.
- An improving risk mood could hurt the USD in the absence of high-impact data releases.
GBP/USD failed to make a decisive move in either direction and closed the day virtually unchanged on Thursday. The pair holds steady above 1.2100 early Friday but it remains below key technical levels that could limit the upside.
Although the risk-averse market atmosphere helped the US Dollar (USD) stay resilient against its rivals on Thursday, a more-than-2% decline seen in the benchmark 10-year US Treasury bond yield made it difficult for the currency to gather further strength.
Pound Sterling price this week
The table below shows the percentage change of Pound Sterling (GBP) against listed major currencies this week. Pound Sterling was the weakest against the Australian Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.26% | 0.22% | 0.68% | -0.49% | 0.10% | 0.03% | 0.72% | |
| EUR | -0.27% | -0.05% | 0.41% | -0.76% | -0.17% | -0.24% | 0.47% | |
| GBP | -0.20% | 0.03% | 0.47% | -0.70% | -0.10% | -0.18% | 0.53% | |
| CAD | -0.67% | -0.43% | -0.48% | -1.17% | -0.57% | -0.65% | 0.03% | |
| AUD | 0.49% | 0.77% | 0.72% | 1.16% | 0.61% | 0.52% | 1.23% | |
| JPY | -0.10% | 0.16% | 0.09% | 0.57% | -0.65% | -0.09% | 0.63% | |
| NZD | -0.02% | 0.22% | 0.19% | 0.64% | -0.51% | 0.08% | 0.68% | |
| CHF | -0.74% | -0.48% | -0.53% | -0.07% | -1.24% | -0.64% | -0.72% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Meanwhile, the sharp decline seen in EUR/GBP pair following the European Central Bank's (ECB) monetary policy announcements showed that Pound Sterling managed to capture some of the capital outflows out of the Euro, allowing GBP/USD to find support.
The UK's FTSE 100 Index trades modestly higher in the early European session and US stock index futures gain between 0.4% and 1% on the day, reflecting an improving risk sentiment.
In the absence of high-impact data releases, the risk perception could drive GBP/USD's action ahead of the weekend. The USD's failure to capitalize on the upbeat third-quarter Gross Domestic Product growth data on Thursday shows that USD buyers might be looking for an opportunity to book their profits instead of adding to long positions. Hence, a bullish action in Wall Street could trigger a USD selloff in the American session.
GBP/USD Technical Analysis
GBP/USD faces immediate resistance at 1.2150, where the 50-period Simple Moving Average (SMA) on the 4-hour chart is located, ahead of 1.2190-1.2200 (100-period SMA, Fibonacci 23.6% retracement of the latest downtrend) and 1.2230 (200-period SMA).
On the downside, 1.2100 (static level) aligns as first support before 1.2075 (static level) and 1.2050 (end-point of the latest downtrend).
- GBP/USD stabilized above 1.2100 in the European session on Friday.
- The pair's near-term technical outlook points to a lack of directional momentum.
- An improving risk mood could hurt the USD in the absence of high-impact data releases.
GBP/USD failed to make a decisive move in either direction and closed the day virtually unchanged on Thursday. The pair holds steady above 1.2100 early Friday but it remains below key technical levels that could limit the upside.
Although the risk-averse market atmosphere helped the US Dollar (USD) stay resilient against its rivals on Thursday, a more-than-2% decline seen in the benchmark 10-year US Treasury bond yield made it difficult for the currency to gather further strength.
Pound Sterling price this week
The table below shows the percentage change of Pound Sterling (GBP) against listed major currencies this week. Pound Sterling was the weakest against the Australian Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.26% | 0.22% | 0.68% | -0.49% | 0.10% | 0.03% | 0.72% | |
| EUR | -0.27% | -0.05% | 0.41% | -0.76% | -0.17% | -0.24% | 0.47% | |
| GBP | -0.20% | 0.03% | 0.47% | -0.70% | -0.10% | -0.18% | 0.53% | |
| CAD | -0.67% | -0.43% | -0.48% | -1.17% | -0.57% | -0.65% | 0.03% | |
| AUD | 0.49% | 0.77% | 0.72% | 1.16% | 0.61% | 0.52% | 1.23% | |
| JPY | -0.10% | 0.16% | 0.09% | 0.57% | -0.65% | -0.09% | 0.63% | |
| NZD | -0.02% | 0.22% | 0.19% | 0.64% | -0.51% | 0.08% | 0.68% | |
| CHF | -0.74% | -0.48% | -0.53% | -0.07% | -1.24% | -0.64% | -0.72% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Meanwhile, the sharp decline seen in EUR/GBP pair following the European Central Bank's (ECB) monetary policy announcements showed that Pound Sterling managed to capture some of the capital outflows out of the Euro, allowing GBP/USD to find support.
The UK's FTSE 100 Index trades modestly higher in the early European session and US stock index futures gain between 0.4% and 1% on the day, reflecting an improving risk sentiment.
In the absence of high-impact data releases, the risk perception could drive GBP/USD's action ahead of the weekend. The USD's failure to capitalize on the upbeat third-quarter Gross Domestic Product growth data on Thursday shows that USD buyers might be looking for an opportunity to book their profits instead of adding to long positions. Hence, a bullish action in Wall Street could trigger a USD selloff in the American session.
GBP/USD Technical Analysis
GBP/USD faces immediate resistance at 1.2150, where the 50-period Simple Moving Average (SMA) on the 4-hour chart is located, ahead of 1.2190-1.2200 (100-period SMA, Fibonacci 23.6% retracement of the latest downtrend) and 1.2230 (200-period SMA).
On the downside, 1.2100 (static level) aligns as first support before 1.2075 (static level) and 1.2050 (end-point of the latest downtrend).
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