GBP/USD Analysis: Wednesday’s upsurge was more like a stop-run than a fresh breakout

Haresh Menghani FXStreet

On Wednesday, the GBP/USD pair surged through the 1.3900 handle for the first time since the Brexit vote in June 2016 but gave up a major part of its strong gains. A goodish US Dollar rebound supported upbeat industrial production/capacity utilization data and the Fed's Beige Book, kept a lid on any further up-move.

Yesterday's strong upsurge lacked any fundamental trigger and the subsequent price-action now seems to suggest that the momentum was led by some short-covering following a break above 1.3835 resistance. The 1.3835-40 region marks a short-term ascending trend-channel resistance and hence, it would be prudent to wait for some follow-through buying interest before positioning for any further appreciating move.

In absence of any fresh macroeconomic data from the UK, traders would take cues from the US economic releases - housing market data, Philly Fed Manufacturing Index and weekly initial jobless claims.

Meanwhile, a sustained move beyond the mentioned ascending trend-channel hurdle would confirm a fresh bullish breakout and assist the pair to make a fresh attempt towards reclaiming the 1.3900 handle. A follow-through momentum has the potential to continue boosting the pair even beyond 1.3940-45 area (Wednesday's swing high) towards testing the key 1.40 psychological mark resistance.

On the flip side, any meaningful retracement is likely to find support near the 1.3800 handle, which if broken could extend the corrective slide back towards 1.3740 support area en-route the 1.3700 round figure mark and 1.3660 support.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

EUR/USD slumps below 1.1800 on hawkish Fed Minutes, eyes on ECB succession

The EUR/USD pair tumbles to a near two-week low around 1.1785 during the early Asian session on Thursday. The US Dollar strengthens against the Euro on hawkish FOMC minutes that revived speculation about potential interest rate hikes if inflation remains elevated.

GBP/USD extends decline as weak jobs data bolsters BoE rate cut bets

The Pound Sterling continued to backslide under sustained pressure on Wednesday, following through after the UK employment report on Tuesday showed a labour market deteriorating faster than expected.

Gold rises above $4,950 as US-Iran tensions boost safe-haven demand

Gold price holds positive ground near $4,985 during the early Asian session on Thursday. The precious metal recovers amid shifts in geopolitical sentiment, boosting safe-haven demand. Traders will keep an eye on the release of US Initial Jobless Claims, Pending Home Sales data, and the Fedspeak later on Thursday.

Zora launches attention markets on Solana network

Zora has launched a new attention markets feature on the Solana network, allowing users to trade and speculate on emerging online cultural trends.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.