GBP/USD Forecast: Pound Sterling struggles to attract bulls despite improving risk mood
- GBP/USD recovered above 1.2600 in the European morning on Tuesday.
- UK's FTSE 100 Index opened sharply higher following long weekend.
- Pound Sterling could start pushing higher if it stabilizes above 1.2630.
GBP/USD gained traction in the Asian session and climbed above 1.2600 after posting small gains on Monday. The pair, however, is yet to show signs of a bullish reversal.
Wall Street's main indexes opened higher on Monday and made it difficult for the US Dollar (USD) to gather strength against its rivals. As risk flows continued to dominate the financial markets during the Asian trading hours on Tuesday, the USD struggled to find demand, allowing GBP/USD to build on Monday's recover gains.
Following a long weekend, the UK's FTSE 100 Index opened more than 1% higher, highlighting the upbeat market mood. GBP/USD, however, retreated slightly as the pullback seen in US stock index futures supported the USD.
Pound Sterling price today
The table below shows the percentage change of Pound Sterling (GBP) against listed major currencies today. Pound Sterling was the strongest against the Euro.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.13% | 0.00% | 0.05% | -0.18% | 0.03% | -0.26% | 0.11% | |
| EUR | -0.11% | -0.15% | -0.08% | -0.32% | -0.12% | -0.37% | -0.02% | |
| GBP | 0.02% | 0.16% | 0.06% | -0.19% | 0.05% | -0.22% | 0.12% | |
| CAD | -0.03% | 0.09% | -0.07% | -0.23% | -0.01% | -0.29% | 0.08% | |
| AUD | 0.18% | 0.31% | 0.19% | 0.22% | 0.21% | -0.05% | 0.32% | |
| JPY | -0.04% | 0.08% | -0.07% | 0.00% | -0.25% | -0.29% | 0.11% | |
| NZD | 0.24% | 0.38% | 0.22% | 0.29% | 0.05% | 0.28% | 0.38% | |
| CHF | -0.12% | -0.01% | -0.14% | -0.09% | -0.32% | -0.09% | -0.37% |
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).
In the second half of the day, the US Bureau of Labor Statistics will release JOLTS Job Openings data for July. Markets expect the number of job openings on the last business day of July to decline to 9.46 million from 9.58 million in June. If job openings rise unexpectedly in July, markets could see that as a confirmation of tight labor market conditions. In that case, hawkish Federal Reserve bets could help the USD regain poise, at least in the near term.
The US economic docket will also feature CB Consumer Confidence Index data for August but investors are likely to ignore that report unless it offers a significant surprise.
GBP/USD Technical Analysis
Following the earlier recovery, GBP/USD turned south after touching the static resistance at 1.2630. If the pair rises above that level and starts using it as support, 1.2680 (50-period Simple Moving Average (SMA)) and 1.2700 (Fibonacci 23.6% retracement of the latest downtrend, 100-period SMA) could be seen as next recovery targets.
Looking south, 1.2600 (20-period SMA, psychological level) aligns as immediate support ahead of 1.2560 (end-point of the downtrend) and 1.2540 (static level).
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Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
