• GBP/USD fades bounce off monthly low, indecisive of late.
  • Brexit jitters, US inflation data and covid headlines fail to offer any meaningful signals.
  • BOE hawks seek strong data to confirm tapering concerns but Delta covid variant challenges the bulls.
  • US PPI, Jobless Claims also become important for fresh impulse.

GBP/USD treads water around 1.3865-70 during early Thursday as traders await the key UK data for fresh impulse. The quote bounced off a monthly low the previous day but struggles to carry the rebound amid a lack of major data/events in Asia.

The US dollar weakness could be cited as the key catalyst for the GBP/USD pair’s earlier rebound whereas mixed inflation data and Fedspeak offer further details on the market’s skepticism over the moves. It should be noted, however, that chatters over US-China diplomatic talks and a lack of major updates on the covid, as well as US stimulus front, not to forget pre-data caution, also challenge immediate moves of the GBP/USD pair.

Bloomberg signaled US Treasury Secretary Janet Yellen’s first visit to China, at this diplomatic position, followed by local media suggesting US Secretary of State Sherman’s visit to Beijing, but investors failed to welcome the upbeat news amid the covid woes in China and the US. On the same line were chatters concerning the relation of the Aussie conditions to the COVID-19 as the latest figures ease and the government pushes hard for the vaccinations. Additionally, US President Joe Biden’s indirect rejection of the challenges to budget talks, earlier raised by Republicans, was also ignored as it’s a long way before anything concrete develops.

The US Dollar Index (DXY) failed to extend the three-day uptrend beyond April’s high as the US Consumer Price Index (CPI) data backs the Federal Reserve’s (Fed) “transitory” outlook on inflation. The headline CPI remained unchanged at 5.4% YoY versus 5.3% forecast whereas the core CPI, ex Food & Energy, eased to 4.3% from 4.5% previous readouts. Also favoring the US dollar pullback could be the comments from Fed Reserve Bank of Kansas City President Esther George suggesting the road ahead to policy normalization “is likely to be a long and bumpy,” even her early comments favored tapering.

At home, UK Health Minister Sajid Javid confirmed, like The Guardian, that the fully-vaccinated British people above 18s need not self-isolate. However, Brexit woes, signaled by the UK Express, challenges the GBP/USD buyers. “The EU appears to be readying a final ultimatum to the UK as the bloc's patience is "wearing thin" over a command paper to renegotiate the Northern Ireland Protocol, a senior MEP (Member of European Parliament) has said,” per the news.

Against this backdrop, US 10-year Treasury yields add 1.7 basis points (bps) to 1.342% whereas US stock futures remain sluggish around record top by the press time.

Looking forward, monthly prints of the UK GDP, Manufacturing Production and Industrial Production, as well as the preliminary readings of the second quarter (Q2) GDP, will direct immediate GBP/USD moves. Given the upbeat expectations from the scheduled figures, the cable may extend the latest rebound as a positive outcome backs the BOE hawks. However, the US Producer Price Index (PPI) for July and the Weekly Jobless Claims, coupled with Fedspeak, will also be important to watch.

Technical analysis

The cable pair dropped to the lowest in 12 days before bouncing off 1.3802 the previous day. In doing so, the quote portrays a bullish flag formation on the four-hour (4H) play. In addition to the upside favoring chart pattern, the pair’s sustained trading above 200-SMA and steady RSI, modest as well, keep GBP/USD buyers hopeful. However, a convergence of the flag’s upper line and early July’s top, surrounding 1.3910, becomes a strong resistance whereas 200-SMA around 1.3830 will initially challenge the pullback moves before the support line of the flag, near 1.3810, stops the short-term sellers.

Additional important levels

Overview
Today last price 1.387
Today Daily Change 0.0005
Today Daily Change % 0.04%
Today daily open 1.3865
 
Trends
Daily SMA20 1.3832
Daily SMA50 1.3901
Daily SMA100 1.3926
Daily SMA200 1.3771
 
Levels
Previous Daily High 1.3888
Previous Daily Low 1.3803
Previous Weekly High 1.3958
Previous Weekly Low 1.3861
Previous Monthly High 1.3984
Previous Monthly Low 1.3572
Daily Fibonacci 38.2% 1.3855
Daily Fibonacci 61.8% 1.3835
Daily Pivot Point S1 1.3816
Daily Pivot Point S2 1.3767
Daily Pivot Point S3 1.3731
Daily Pivot Point R1 1.3901
Daily Pivot Point R2 1.3937
Daily Pivot Point R3 1.3986

 

 

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 Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD falls below 1.0500 after US NFP data

EUR/USD falls below 1.0500 after US NFP data

EUR/USD dropped below 1.0450 but managed to stage a modest rebound. The US Dollar preserves its strength against its rivals and doesn't allow the pair to gain traction after the data from the US showed that Nonfarm Payrolls rose by 263,000 in November.

EUR/USD News

GBP/USD turns south on upbeat US jobs report, trades below 1.2200

GBP/USD turns south on upbeat US jobs report, trades below 1.2200

GBP/USD lost nearly 100 pips with the immediate reaction to the upbeat November jobs report from the US and broke below 1.2200. The US Dollar Index clings to strong daily gains above 105.00 after the data showed that Nonfarm Payrolls rose by 263,000.

GBPUSD News

Gold retreats below $1,790 as US yields surge on US NFP

Gold retreats below $1,790 as US yields surge on US NFP

Gold price turned south and dropped below $1,790 in the early American session. The benchmark 10-year US Treasury bond yield is up more than 2% on the day near 3.6% after the bigger-than-expected November job growth, weighing heavily on XAU/USD.

Gold News

FTX exchange collapse, loss of $3.1 billion could have been avoided on one condition

FTX exchange collapse, loss of $3.1 billion could have been avoided on one condition

FTX exchange, founded by Samuel Bankman-Fried (SBF), has consistently made headlines over the past month for its liquidity crisis and triggering a collapse in the crypto ecosystem.

Read more

AMC advances more than 3% in premarket day after being halted

AMC advances more than 3% in premarket day after being halted

AMC stock is up 3.4% in Friday's premarket just a day after authorities halted trading due to unusual volatility. Thursday saw options volume three times higher than the 20-day average.

Read more

Forex MAJORS

Cryptocurrencies

Signatures