GBP/USD stages a comeback reclaims 1.2100 despite strong US economic data
|- GBP/USD rebounds from 1.2069 to 1.2128, despite downbeat market sentiment and strong Greenback.
- US GDP growth at 4.9% and soaring durable goods orders fuel speculation of further Fed rate hikes.
- UK retail sales hit worst October level, reflecting households' struggle with inflation and slow growth.
The British Pound (GBP) is recovering some ground against the US Dollar (USD) late in the North American session on Thursday after dipping to a daily low of 1.2069. GBP/USD buyers stepped in around the latter and lifted the pair to its current exchange rate of 1.2128, registering gains of 0.16%.
Pound gains against the Dollar, finding support in falling US Treasury bond yields
Wall Street continues to trade with losses, portraying a downbeat market sentiment. The GBP/USD remains underpinned by the drop in US Treasury bond yields, as the Greenback continues to remain strong, as shown by the US Dollar Index (DXY) gaining 0.07%, up at 106.61.
Data from the United States (US) sponsored the GBP/USD leg down, as the economy in the third quarter grew at a 4.9% QoQ, the fastest pace in almost two years. That, along with upbeat Durable Goods Orders in September, soaring 4.7%, smashing forecasts and the latest month’s figures at 1.7% and -0.1% contraction, underpinned the US Dollar on speculations that the US central bank would raise rates once more.
Aside from this, unemployment claims for the latest week ending October 21, rose above the forecast of 208K, and jumped to 210K, an indicator of the labor market easing.
On the UK front, the Confederation of British Industry (CBI) revealed that retail sales reported their worst October for sales, as households struggle amid difficult economic times, with high inflation and economic growth slumping. Sales plunged -36, well below the -16 contraction estimated by analysts
GBP/USD Price Analysis: Technical outlook
From a technical perspective, volatility in the GBP/USD pairs continues to shrink, as the Average True Range (ATR) has the pair moving 92 pips. With that in mind, the pair’s direction is downwards after a death cross was formed nine days ago, opening the door for further losses. The GBP/USD first support would be today’s low of 1.2069, followed by the October 4 low of 1.2037. A breach of the latter would pave the way toward 1.1800, the next support level. On the contrary, the major could challenge the 1.2300 figure once buyers reclaim the October 24 high of 1.2288.
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