- GBP/USD gains traction for the sixth straight day and climbs to a two-week high.
- The UK government’s U-turn on scraping higher tax rates continues to lift sterling.
- The USD extends its recent sharp retracement slide and offers additional support.
The GBP/USD pair attracts some dip-buying near the 1.1280 region and turns positive for the sixth successive day on Tuesday. The momentum lifts spot prices to a two-week high, back above the 1.1400 mark during the early European session and is sponsored by a combination of factors.
The UK government's U-turn to reverse a controversial tax cut plan announced in its mini-budget last week continues to underpin the British pound. The US dollar, on the other hand, extends its recent sharp pullback from a two-decade high amid the ongoing downfall in the US Treasury bond yields and offers additional support to the GBP/USD pair.
The Bank of England reaffirmed its willingness to buy up to £5 billion of long-dated gilts and this helped drag the US Treasury bond yields further away from a multi-year top touched last week. Apart from this, the prevalent risk-on mood - as depicted by a strong rally across the global equity markets - is seen as another factor weighing on the safe-haven buck.
With the latest leg up, the GBP/USD pair confirms a breakout back above a nearly two-month-old descending trend-line resistance. This might have already set the stage for an extension of the recent recovery from an all-time low touched last Monday. In the absence of any macro data from the UK, spot prices remain at the mercy of the USD price dynamics.
Later during the early North American session, traders will take cues from the US economic docket - featuring the release of JOLTS Job Openings and Factory Orders data. This, along with speeches by FOMC members, the US bond yields and the broader risk sentiment, will drive the USD demand and provide some meaningful impetus to the GBP/USD pair.
Technical levels to watch
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.
Recommended content
Editors’ Picks
AUD/USD bounces to 0.6450, shrugs off mixed Australian jobs data
AUD/USD is rebounding to test 0.6450 amid renewed US Dollar weakness in the Asian session on Thursday. The pair reverses mixed Australian employment data-led minor losses, as risk sentiment recovers.
USD/JPY drops to test 154.00 on Japan's intervention warnings
USD/JPY extends losses to test 154.00 in Asian trading on Thursday. The pair is undermined by the latest US Dollar pullback, Japan's FX intervention risks and a softer risk tone. Focus shifts to more Fedspeak and US data.
Gold price finds buyers again near $2,355 as USD licks its wounds
Gold price is attempting a tepid bounce in the Asian session, having found fresh demand near $2,355 once again. Gold price capitalizes on a softer risk tone and an extended weakness in the US Treasury bond yields, despite the recent hawkish Fed commentary.
Manta Network price braces for volatility as $44 million worth of MANTA is due to flood markets
Manta Network price was not spared from the broader market crash instigated by a weakness in the Bitcoin market. While analysts call a bottoming out in the BTC price, the Web3 modular ecosystem token could suffer further impact.
Investors hunkering down
Amidst a relentless cautionary deluge of commentary from global financial leaders gathered at the International Monetary Fund and World Bank Spring meetings in Washington, investors appear to be taking a hiatus after witnessing significant market movements in recent weeks.