• The GBP/USD prepares to finish the week with losses close to 1.80%.
  • Worst than estimated, US manufacturing figures propelled the US dollar higher, a headwind for the GBP/USD.
  • Investors start to price in a less aggressive Fed, as illustrated by US Treasury yields plunging more than ten bps.

The British pound trips below the 1.2000 mark, reaching a two-week low near 1.1975, after a US manufacturing report showed that, albeit expanding, the economy keeps hitting the brakes amidst growing concerns about a stagflation scenario. However, GBP/USD buyers reclaimed the figure, and at the time of writing, the GBP/USD is trading at 1.2055, down 0.98%.

Negative sentiment and US data showing that the economy is slowing bolstered the US dollar

Risk-off impulse witnessed by global equities sliding, increased appetite for safe-haven assets. The Institute for Supply Manufacturing reported that June’s Manufacturing index expanded to 53.0, lower than the 56.1 reported in May. Albeit showing that the economy stats in expansionary territory for the 25th month in a row, it’s slowing at the time that the Federal Reserve is front-loading aggressive rate hikes to the Federal funds rate (FFR).

Timothy R. Fiore, Chair of the Institute for Supply Management, commented on the report that the manufacturing sector is being “powered” by demand while has been “held back by supply chain constraints.” Furthermore, the employment index, despite contracting, shows progress, according to the survey. Prices eased for the third month in a row while new orders fell.

Meanwhile, an absent UK economic docket left GBP/USD traders adrift to US market data. The major reacted to the downside on the release, to fresh two-week lows, but of late, recovered some ground and has bounced close to 80 pips since.

In the bond market, US Treasury yields are plummeting, led by 2s, 5s, and 10s, tumbling more than ten basis points, as traders begin to price in a less aggressive US Federal Reserve. This means that financial analysts’ focus shifted towards growth amidst a time of aggressive rate hikes by worldwide central banks, which are fighting inflation levels at 40-year highs. Nevertheless, the above-mentioned shows that central banks are behind the curve and, if their scenario looks cloudy, are trying to tackle inflation without getting the economy into a recession.

GBP/USD Key Technical Levels

GBP/USD

Overview
Today last price 1.2055
Today Daily Change -0.0122
Today Daily Change % -1.00
Today daily open 1.2177
 
Trends
Daily SMA20 1.2297
Daily SMA50 1.2414
Daily SMA100 1.2817
Daily SMA200 1.3162
 
Levels
Previous Daily High 1.2188
Previous Daily Low 1.2092
Previous Weekly High 1.2324
Previous Weekly Low 1.2161
Previous Monthly High 1.2617
Previous Monthly Low 1.1934
Daily Fibonacci 38.2% 1.2152
Daily Fibonacci 61.8% 1.2129
Daily Pivot Point S1 1.2117
Daily Pivot Point S2 1.2056
Daily Pivot Point S3 1.2021
Daily Pivot Point R1 1.2213
Daily Pivot Point R2 1.2249
Daily Pivot Point R3 1.2309

 

 

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