The GBP/USD pair rose to a high of 1.5322 on Thursday and extended gains to its 200-DMA at 1.5335 in Asia today. A slightly weaker than expected US Q3 GDP print led to a spike in the GBP/USD pair. Moreover, the pair repeatedly found support at 1.5248 (50% of Apr-June rally) and eventually made its way higher during the NY session.
Focus on GBP crosses and US data
The GBP/JPY and EUR/GBP cross could influence the cable today. The GBP/JPY pair dipped to a low of 184.30 after the Bank of Japan kept the policy unchanged, however, the pair made its way back up ahead of Kuroda’s comments. In case Kuroda points to more easing ahead, the GBP/JPY pair could rise towards 186.40-186.50, thereby pushing the cable back to its 200-DMA at 1.5335. Later in the day, an upbeat Eurozone preliminary Oct CPI figure could push up EUR/GBP cross and add to the bearish pressure on the GBP/USD pair.
US personal spending report
The Fed policy statement released earlier this week talked up the December rate hike bets, however, by no means a rate hike is a done deal and the bank stays data dependent. The US Q3 preliminary GDP (subject to revisions ahead) confirmed the Fed’s view that the economy continues to expand at a moderate pace. The policy statement also sounded upbeat on household spending. But, the data due later today is likely to show the personal spending in October slowed to 0.2% and the personal income growth also dropped to 0.2%. A weaker-than-expected personal spending figure could undo the post-Fed optimism and trigger USD weakness ahead of monthly closing.
Technicals – inverted head and shoulder on hourly chart?
Sterling was rejected at its 200-DMA at 1.5335 earlier today, but remains resilient around 1.5320. The hourly chart shows prices could fall back to 1.5270 followed by a revival, leading to an inverted head and shoulder formation with neckline resistance around 1.5335. A break above 1.5335 (confluence with 200-DMA) could open the doors for 1.5420. However, a break below 1.5270 may lead to a re-test of 1.5247 levels.
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 clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.