- GBP/USD recovered above 1.2650 after closing in the red on Wednesday.
- The US Dollar struggles to find demand ahead of key inflation data.
- The pair could face stiff resistance at 1.2700.
GBP/USD staged a late rebound on Wednesday but ended up closing the day in negative territory. The pair clings to small daily gains above 1.2650 early Thursday as the US Dollar (USD) struggles to find demand ahead of key inflation data.
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 strongest against the New Zealand Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.27% | 0.08% | 0.55% | 0.94% | -0.47% | 1.53% | -0.34% | |
| EUR | 0.28% | 0.35% | 0.83% | 1.22% | -0.19% | 1.81% | -0.07% | |
| GBP | -0.06% | -0.33% | 0.50% | 0.89% | -0.53% | 1.46% | -0.39% | |
| CAD | -0.56% | -0.83% | -0.51% | 0.40% | -1.03% | 0.99% | -0.90% | |
| AUD | -0.97% | -1.23% | -0.88% | -0.39% | -1.42% | 0.62% | -1.30% | |
| JPY | 0.47% | 0.20% | 0.55% | 1.02% | 1.41% | 2.00% | 0.13% | |
| NZD | -1.57% | -1.83% | -1.50% | -1.00% | -0.61% | -2.03% | -1.92% | |
| CHF | 0.35% | 0.07% | 0.39% | 0.91% | 1.30% | -0.12% | 1.88% |
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).
The Personal Consumption Expenditures (PCE) Price Index is forecast to rise 2.4% on a yearly basis in January, at a softer pace than the 2.6% increase recorded in December. The Core PCE Price Index, the Federal Reserve's (Fed) preferred gauge of inflation, is expected to rise 0.4% on a monthly basis.
In case the monthly Core PCE inflation comes in hotter than anticipated, the immediate market reaction could provide a boost to the USD. Although investors see only a small chance of the Federal Reserve cutting the policy rate in May, a strong inflation data could cause markets to reassess the total number of rate cuts this year. According to the CME FedWatch Tool, there is nearly a 75% probability that the Fed will reduce the policy rate by a total of 75 basis points in 2024.
On the other hand, a reading near December's 0.2% increase, or lower, could weigh on the USD and help GBP/USD edge higher. In this scenario, an improving risk mood could help the pair push higher after Wall Street's opening bell. At the time of press, US stock index futures were down between 0.3% and 0.4%.
GBP/USD Technical Analysis
GBP/USD holds above 1.2650, where the Fibonacci 23.6% retracement of the long-term uptrend and the 200-period Simple Moving Average (SMA) on the 4-hour chart align. If the pair drops below that level and confirms it as resistance, technical sellers could take action. In this scenario, 1.2630 (100-period SMA) could act as interim support before 1.2600 (psychological level, static level).
On the upside, 1.2680 (ascending trend line) aligns as first resistance before 1.2700 (psychological level, static level). With a decisive break above the latter, GBP/USD could target 1.2740 (static level) next.
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
Editors’ Picks
EUR/USD retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
-637336005550289133_XtraSmall.jpg)
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.