- GBP/USD went into a consolidation phase near 1.2650 following Wednesday's drop.
- Pound Sterling could have a hard time staging a steady recovery.
- Markets await Jobless Claims and Q3 GDP (revision) data from the US.
GBP/USD stabilized near 1.2650 early Thursday after losing nearly 100 pips on Wednesday. Although the near-term technical outlook points to a loss of bearish momentum, the pair could have a difficult time rising steadily following the soft inflation readings from the UK.
Market positioning shifted toward an earlier Bank of England (BoE) policy pivot after the UK Consumer Price Index (CPI) readings for November came in below analysts' forecasts on Wednesday. Goldman Sachs said that they now see the BoE opting for a 25 basis points rate cut in May, compared to June before 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 weakest against the Swiss Franc.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.48% | 0.25% | -0.20% | -0.70% | 0.65% | -0.59% | -0.97% | |
| EUR | 0.47% | 0.69% | 0.29% | -0.22% | 1.13% | -0.10% | -0.49% | |
| GBP | -0.26% | -0.73% | -0.45% | -0.96% | 0.40% | -0.84% | -1.23% | |
| CAD | 0.20% | -0.29% | 0.41% | -0.51% | 0.84% | -0.40% | -0.78% | |
| AUD | 0.70% | 0.23% | 0.92% | 0.52% | 1.35% | 0.12% | -0.26% | |
| JPY | -0.66% | -1.13% | -0.40% | -0.82% | -1.36% | -1.24% | -1.62% | |
| NZD | 0.57% | 0.09% | 0.82% | 0.38% | -0.12% | 1.22% | -0.40% | |
| CHF | 0.96% | 0.49% | 1.21% | 0.78% | 0.28% | 1.60% | 0.40% |
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 US Dollar (USD) struggles to find demand early Thursday and helps GBP/USD keep its footing. US stock index futures were last seen rising between 0.4% and 0.6%, reflecting an improving risk mood. In case Wall Street's main indexes open higher and gather bullish momentum in the second half of the day, the USD could continue to weaken against its peers.
The US economic docket will feature the final revision to the third-quarter Gross Domestic Product growth alongside the weekly Initial Jobless Claims. If the number of first-time applications for unemployment benefits rise at a stronger pace than anticipated, the USD could come under pressure with the immediate reaction. On the other hand, a reading at or below 200K could provide a boost to the USD and trigger another leg lower in GBP/USD.
GBP/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart recovered toward 50 and GBP/USD stabilized near the 100-period Simple Moving Average (SMA), currently located at 1.2650, highlighting a loss of bearish momentum.
On the upside, 1.2700 (lower limit of the long-term ascending regression channel) aligns as strong resistance. In case the pair manages to return within the ascending channel by confirming this level as support, technical buyers could show interest. In this scenario, 1.2750 (static level) and 1.2790-1.2800 (mid-point of the ascending channel, psychological level) could be seen as next resistances.
If GBP/USD fails to reclaim 1.2650, sellers could take action. In this case, 1.2600 (Fibonacci 23.6% retracement of the latest uptrend) and 1.2540 (200-period SMA) could be set as next bearish targets.
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 hovers above 1.1000 ahead of ECB policy announcements
EUR/USD is gyrating in a tight range above 1.1000 in Asian trading on Thursday. Traders assess the latest US CPI inflation data, bracing for the ECB policy announcements amid a positive risk sentiment and sustained US Dollar strength.
GBP/USD recovers to 1.3050, US data in focus
GBP/USD is recovering from three-week lows to trade near 1.3050 in the European morning on Thursday. The pair is underpinned by persisting risk flows and a pause in the US CPI-led Dollar rebound. The focus now shifts to the US PPI inflation data.
Gold price struggles to capitalize on modest intraday uptick amid stronger US Dollar
Gold price (XAU/USD) trims a part of its modest intraday gains, albeit manages to hold its neck comfortably above the $2,500 psychological mark through the early European session on Thursday.
European Central Bank widely expected to cut interest rates in September
The European Central Bank is expected to cut key rates by 25 bps at the September policy meeting. ECB President Christine Lagarde’s presser and updated economic forecasts will be closely scrutinized for fresh policy cues.
Uniswap price is poised for a rally if it breaks above the ascending triangle pattern
Uniswap price trades inside an ascending triangle pattern; a breakout signals a rally ahead. This bullish move is further supported by UNI’s on-chain data, which shows a negative Exchange Flow Balance and decreasing exchange supply, hinting at a rally ahead.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.