GBP/USD recovers towards 1.1850 amid DXY exhaustion, Jackson Hole buzz

GBP/USD is marching towards 1.1850 as DXY skids on trimmed Fed hawkish bets.
As per a Reuters poll, a rate hike of 50 bps by the Fed looks likely.
Higher UK labor cost data is expected to delight the BOE ahead.

Sagar Dua FXStreet

The GBP/USD pair has rebounded sharply after the pound bulls defended the critical support of 1.1800 in the Tokyo session. The cable is heading towards the critical hurdle of 1.1850 and is likely to cross the same as the US dollar index (DXY) is facing the heat of exhaustion after a juggernaut rally. The asset is on the verge of giving an upside break of the consolidation formed in a chartered territory of 1.1805-1.1834.

For a while, the pound bulls have violated the continuation of the three-day losing streak by not surrendering Friday’s low of 1.1791. The DXY has displayed a minor downside after failing to sustain above 108.20. The asset has picked offers after the expectations of a consecutive 75 basis points (bps) rate hike by the Federal Reserve (Fed) trimmed.

“Most economists in an Aug. 16-19 Reuters poll predicted a half percentage point hike next month, the same as in the last poll, which would take the key interest rate to 2.75%-3.00%.”

Although, the commentary from Fed chair Jerome Powell will clear the clouds of uncertainty over further guidance. A slowdown in the pace of hiking interest rates by the Fed is on the cards to avoid the consequences of squeezing liquidity from the market.

On the pound front, vulnerable employment data impacted the pound bulls. However, a decent improvement in the labor cost data has resulted in a sigh of relief for the Bank of England (BOE).

The inflation rate is accelerating in the UK zone dramatically and to pay off the higher payouts, improvement in the wage rate was vulnerable. Therefore, the BOE policymakers were not deploying the quantitative tightening measures with full independence. The meaningful improvement in the labor cost index will delight BOE Governor Andrew Bailey while drafting the monetary policy.

GBP/USD

Overview
Today last price	1.1833
Today Daily Change	0.0005
Today Daily Change %	0.04
Today daily open	1.1828

Trends
Daily SMA20	1.2102
Daily SMA50	1.2088
Daily SMA100	1.2369
Daily SMA200	1.2876

Levels
Previous Daily High	1.1937
Previous Daily Low	1.1792
Previous Weekly High	1.2148
Previous Weekly Low	1.1792
Previous Monthly High	1.2246
Previous Monthly Low	1.176
Daily Fibonacci 38.2%	1.1847
Daily Fibonacci 61.8%	1.1882
Daily Pivot Point S1	1.1768
Daily Pivot Point S2	1.1708
Daily Pivot Point S3	1.1623
Daily Pivot Point R1	1.1913
Daily Pivot Point R2	1.1998
Daily Pivot Point R3	1.2058

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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