GBP/USD: recovery out of sight with lower oil


FXStreet (Guatemala) - GBP/USD is failing on the recovery attempts and is capped by the descending 4hr 20 sma resistance at 1.4577.

The greenback has garnered safe haven flows while sterling is on the back foot with rate hike prospects being pushed back month over month this year. This week will come with the BoE meeting and minutes, and the detail in the minutes will be scrutinised for possible timings of a possible rate hike this year. Oil will also have an effect on the pound as the UK being oil producer, despite the UK being a net energy importer. It might not be a coincidence that

Sterling has shed more than 4.5 cents since the December 28 high near $1.4970 while oil has deteriorated similarly in price. Analysts at Brown Brothers Harriman noted that Sterling took out last year's low, reaching the lowest level since early 2010, just above $1.45.

"That early 2010 low was near $1.4250, and that is the next objective. Sterling posted an outside down session before the weekend, illustrating its inability to sustain even a modest uptick. Technical indicators give little reason to pick a bottom yet."

Oil headed to $30

The analysts added, "Oil prices continue to trade heavily. Technical indicators give little reason to think that a significant low is at hand. Some near-term consolidation is possible, but resistance is seen in the $34.60-$35.35 area. Many observers are to be looking at sub-$30 levels."

GBP/USD levels

Technically, Karen Jones, chief analyst at Commerzbank explained that intraday Elliott counts are suggesting that the down move is exhausted for now but while capped by the accelerated downtrend at 1.4673 we will continue to look for losses to 1.4385 the 30 year support line. Above 1.4673, rallies should struggle 1.4840/1.5000 and while capped here the market will remain offered."

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD climbs above 1.1250 as investors eye coronavirus headlines

EUR/USD preserved its recovery momentum early Friday and rose above 1.1250 during the European trading hours. Markets are doubting the Fed's policy tightening prospects as the new coronavirus variant revives concerns over the economic recovery losing steam.

EUR/USD News

GBP/USD rebounds toward mid-1.3300s on broad dollar weakness

GBP/USD reversed its direction after dipping below 1.3300 earlier in the day and started to push higher toward 1.3350. The greenback is facing heavy selling pressure amid the sharp decline witnessed in the 10-year US Treasury bond yield.

GBP/USD News

Gold clings to strong gains above $1,800 as US T-bond yields plunge Premium

Gold staged a decisive rebound on Friday and reclaimed $1,800. The intense flight to safety is causing US Treasury bond yields to fall sharply and fueling XAU/USD's rally. Investors await news on vaccines' effectiveness against the new COVID variant.

Gold News

Cardano could tank to $1 if ADA fails to defend crucial support

Cardano price is currently hovering below a freshly shattered 6-hour demand zone, ranging from $1.68 to $1.79. This resulting crash could extend to the immediate and critical foothold at $1.40. 

Read more

Black Friday 2021 Discounts!

Do you want to take your trading skills to the next level? Now you have a chance of leaping forward at attractive introductory rates. For Black Friday, FXStreet is offering discounts of up to 50% on its upgraded Premium plans. 

Subscribe now!

Forex MAJORS

Cryptocurrencies

Signatures