- GBP/USD is seen oscillating in a narrow trading band on the last day of the week.
- The less hawkish FOMC minutes continue to weigh on the USD and offer support.
- Relatively thin trading conditions hold back bullish traders from placing fresh bets.
The GBP/USD pair is seen oscillating in a narrow band through the early European session on Friday and consolidating this week's strong move up to the highest level since August 12. The pair is currently placed around the 1.2100 round figure and remains well within the striking distance of a technically significant 200-day Simple Moving Average (SMA).
The US Dollar struggles to gain any meaningful traction and languishes just above the monthly low, which, in turn, continues to act as a tailwind for the GBP/USD pair. A dovish assessment of the FOMC meeting minutes released on Wednesday continues to drag the US Treasury bond yields lower. This, along with a generally positive tone around the equity markets, is seen undermining the safe-haven greenback.
The British Pound, on the other hand, draws support from the recent sharp decline in the UK government bond yields. This represents an easing of financial conditions in the UK, which should allow the Bank of England to continue raising borrowing costs to tame inflation. The combination of the aforementioned fundamental factors supports prospects for a further near-term appreciating move for the GBP/USD pair.
That said, a bleak outlook for the UK economy might hold back traders from placing aggressive bullish bets amid a bleak outlook for the UK economy. It is worth recalling that the UK Office for Budget Responsibility (OBR) projected the UK GDP to slump by 1.4% next year as compared to a growth of 1.8% forecast in March. This, in turn, might cap gains for the GBP/USD pair amid lighter trading volumes.
Nevertheless, spot prices remain on track to register gains for the third successive week in the absence of relevant market-moving economic releases, either from the UK. The market focus now shifts to next week's important US macro data - the Prelim Q3 GDP report, Core PCE Price Index (the Fed's preferred inflation gauge) and the closely watched monthly employment details, popularly known as NFP.
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
EUR/USD clings to gains near 1.0700, awaits key US data
EUR/USD clings to gains near the 1.0700 level in early Europe on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
Meta takes a guidance slide amidst the battle between yields and earnings
Meta's disappointing outlook cast doubt on whether the market's enthusiasm for artificial intelligence. Investors now brace for significant macroeconomic challenges ahead, particularly with the release of first-quarter GDP data.