- Pound's rally hits resistance at 1.3730 and pulls back below 1.3700.
- The sterling remains positive against a weaker US dollar.
- GBP/USD biased higher while above 1.3595.
The British pound is giving away gains on Thursday’s US trading session, with the pair dropping back to levels below 1.3700 after having peaked at a three-week high at 1.3730. On daily charts, however, cable remains positive, above the top of the recent trading range, at 1.3650/70.
The pound remains supported by hawkish BoE
The sterling has been showing strength over the last two weeks, as the market is pricing an interest rate hike by the Bank of England early next year. With inflation accelerating at levels almost twice the Bank’s target for price stability, BoE officials are starting to openly suggest the possibility of accelerating the monetary policy normalization plan.
Beyond that, the recent European Union's proposal to slash custom checks on British Products to Northern Ireland has eased concerns about another UK-EU dispute on the NI border, which has provided a fresh impulse to the sterling.
On the other end, the US dollar is trading softer amid a higher appetite for risk on Thursday. The decline in US weekly jobless claims, which have dropped below the 300,000 new claims for the first time in the last 19 months, has been overlooked by the market as it was the confirmation on Wednesday the Federal Reserve is set to start rolling back its bonds purchasing program over the next month, suggested by the minutes of the last FOMC meeting, released on Wednesday.
GBP/USD biased higher while above 1.3595 – UOB
From a broader perspective, the FX analysis team at UOB remains positive on the pound, as long as the pair remains above 1.3595: “We have expected GBP to trade within a 1.3500/1.3680 range since early this week (see annotations in the chart below).GBP rose strongly yesterday and the advance has gathered momentum. From here, GBP is likely to head higher to 1.3715. A break of 1.3715 would shift the focus to 1.3750. Only a break of the ‘strong support’ (currently at 1.3595) would indicate that GBP is not ready to head higher.”
Technical levels to watch
|Today last price||1.3679|
|Today Daily Change||0.0019|
|Today Daily Change %||0.14|
|Today daily open||1.366|
|Previous Daily High||1.3665|
|Previous Daily Low||1.3576|
|Previous Weekly High||1.3659|
|Previous Weekly Low||1.3532|
|Previous Monthly High||1.3913|
|Previous Monthly Low||1.3412|
|Daily Fibonacci 38.2%||1.3631|
|Daily Fibonacci 61.8%||1.361|
|Daily Pivot Point S1||1.3602|
|Daily Pivot Point S2||1.3544|
|Daily Pivot Point S3||1.3513|
|Daily Pivot Point R1||1.3692|
|Daily Pivot Point R2||1.3723|
|Daily Pivot Point R3||1.3781|
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.