GBP/USD bounces-back towards 1.4300 on aggressive USD selling

Pound underpinned by the outlook for rising wages and BOE rate hike.
Broad-based USD selling prevails ahead of the US retail sales report.

Dhwani Mehta FXStreet

The GBP/USD pair staged a V-shaped reversal in the last hour and looks to regain the 1.43 handle, having found solid support once again near the 1.4235 region, where the daily lows coincide.

The latest leg up in the spot can be mainly attributed to a fresh bout of selling interest seen around the US dollar, as markets readjust their positions ahead of the key US retail sales data and fresh political developments surrounding the US-Russia conflict.

More so, optimism over the UK wage growth coupled with rising expectations of a Bank of England (BOE) rate hike next month, also collaborates to the buoyant tone seen around the pound, as all eyes remain focused on a big UK macro week ahead. The UK jobs, CPI and retail sales data are due on the cards this week, which will provide fresh momentum on the prices.

GBP/USD levels to watch

Slobodan Drvenica, Information & Analysis Manager at Windsor Brokers, explains, “bulls need a break and close above psychological 1.4300 barrier to neutralize downside risk and open way for test of key mid-term barrier at 1.4244 (25 Jan post-Brexit recovery high).Meanwhile, the pair may hold in extended consolidation, with downside remaining at risk, while bearish scenario on a close below 1.4220 would open the way for deeper pullback and expose supports at 1.4170 (Fibo 38.2% of 1.3965/1.4296) and 1.4141 (rising 10SMA). Res: 1.4268; 1.4277; 1.4300; 1.4345. Sup: 1.4230; 1.4200; 1.4170; 1.4141.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

EUR/USD challenges 1.1800, two-week lows

EUR/USD remains on the defensive, extending its leg lower to the vicinity of the 1.1800 region, or two-week lows, on Tuesday. The move lower comes as the US Dollar gathers further traction ahead of key US data releases, inclusing the FOMC Minutes, on Wednesday.

GBP/USD looks weaker near 1.3500

GBP/USD adds to Monday’s pessimism and puts the 1.3500 support to the test on Tuesday. Cable’s marked pullback comes in response to extra gains in the Greenback while disappointing UK jobs data also collaborate with the offered bias around the British Pound.

Gold loses further momentum, approaches $4,800

Gold recedes to fresh two-week troughs around the $4,800 region per troy ounce on Tuesday. The precious metal builds on Monday’s downtick following a marked rebound in the US Dollar and mixed US Treasury yields across the board.

Crypto Today: Bitcoin, Ethereum, XRP upside looks limited amid deteriorating retail demand

The cryptocurrency market extends weakness with major coins including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trading in sideways price action at the time of writing on Tuesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.