GBP/USD bulls moved in on the 1.3730s but has stalled


Share:
  • GBP/USD has been creeping steadily higher in the face of a softer US dollar.
  • Some hawkish tones have been dialled down at the Fed by recent comments from officials. 

At 1.3729, GBP/USD is higher on the day so far, trading up 0.16% after climbing from a low of 1.3705. The price is stalling here but the US dollar has been on the backfoot and the pound is lapping it up. The Bank of England has been one of the more hawkish of the central banks.

''One of the factors that could trigger further corrective activity in the USD relates to expectations about other G10 central banks,'' analysts at Rabobank said. ''The GBP has found some support on the back of the BoE’s 15 bps rate rise last month and on market expectations of further tightening this year (which we consider to be overdone).''

Meanwhile, the US dollar has been pressured due to some of the less hawkish comments of late, including both the Federal Reserve chair, Jerome Powell, and Philly Fed President Patrick Harker. 

On Thursday, Harker said he sees the Fed starting to shrink its balance sheet “in late 2022 or early 2023” after the central bank has raised its target rate sufficiently, to around 1 per cent from near zero. The comments echoed that of Powell who said the Fed could start to shrink its balance sheet later this year. 

''We're going to end our asset purchases in March, meaning we'll be raising rates over the course of the year," Powell said on Tuesday at his confirmation hearing before the Senate Banking Committee.

"At some point, perhaps later this year, we will start to allow the balance sheet to run off, and that's just the road to normalising policy," he said, adding the US economy "no longer needs or wants" the Fed's very highly accommodative policies.

Looking ahead, ears will be to the ground for Fed's New York president, John Williams. Then, the Fed will move into its blackout period until the next interest rate decision later this month. This leaves US data in focus. In this regard, Retail Sales will be of interest today. 

Analysts at TD Securities explained that Retail Sales probably fell in December, even with higher prices boosting nominal values. ''Spending was likely held down by the fading of fiscal stimulus, payback for earlier-than-usual holiday shopping, and Omicron. We look for a notable 1.4% MoM decline in total sales (consensus: -0.1%) and a larger 2.0% retreat for the control group (consensus: flat). Real as well as nominal spending was likely still up solidly on QoQ basis and strongly on a YoY basis.''

GBP/USD

Overview
Today last price 1.3729
Today Daily Change 0.0026
Today Daily Change % 0.19
Today daily open 1.3703
 
Trends
Daily SMA20 1.348
Daily SMA50 1.3402
Daily SMA100 1.3554
Daily SMA200 1.3737
 
Levels
Previous Daily High 1.3749
Previous Daily Low 1.3701
Previous Weekly High 1.3599
Previous Weekly Low 1.3431
Previous Monthly High 1.355
Previous Monthly Low 1.3161
Daily Fibonacci 38.2% 1.3719
Daily Fibonacci 61.8% 1.373
Daily Pivot Point S1 1.3686
Daily Pivot Point S2 1.3669
Daily Pivot Point S3 1.3638
Daily Pivot Point R1 1.3735
Daily Pivot Point R2 1.3766
Daily Pivot Point R3 1.3783

 

 

Share: Feed news

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.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

EUR/USD eases below 1.1000 ahead of German inflation data

EUR/USD eases below 1.1000 ahead of German inflation data

EUR/USD is trading below 1.1000, losing its upside traction in the European session on Wednesday. The pair is holding steady, as the US Dollar finds its feet despite a sell-off in the US Treasury bond yields. Traders stay cautious ahead of the German inflation and US GDP data. 

EUR/USD News

GBP/USD retreats below 1.2700 as US Dollar decline stalls

GBP/USD retreats below 1.2700 as US Dollar decline stalls

GBP/USD is falling back below 1.2700, extending its retreat from multi-month highs in European trading on Monday. The pair fails to find any inspiration from BoE Governor Bailey's hawkish comments, as the US Dollar looks to stabilize ahead of top-tier economic data and Fedspeak. 

GBP/USD News

Gold price retreats from multi-month peak as USD stages a modest recovery ahead of US GDP

Gold price retreats from multi-month peak as USD stages a modest recovery ahead of US GDP

Gold price (XAU/USD) struggles to capitalize on its intraday gains to the $2,052 area and retreats from a near seven-month top touched earlier this Wednesday.

Gold News

Bitcoin price could touch $41,000 in December, analyst predicts bullish breakout

Bitcoin price could touch $41,000 in December, analyst predicts bullish breakout

Bitcoin worth $1 billion has been withdrawn from exchanges in the last two weeks. The SEC asked for public feedback on Franklin Templeton’s Spot Bitcoin ETF, fueling anticipation of approval. 

Read more

Germany CPI Preview: Inflation set to ease further, not necessarily negative for the Euro Premium

Germany CPI Preview: Inflation set to ease further, not necessarily negative for the Euro

The Federal Statistical Office of Germany (Destatis) will release inflation data on Wednesday at 13:00 GMT. The annual German Consumer Price Index (CPI) is expected to rise 3.5% in November, down from the 3.8% increase reported in October.

Read more

Forex MAJORS

Cryptocurrencies

Signatures