GBP/USD consolidates around 1.2100 mark, just below multi-month high set on Thursday


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  • 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

GBP/USD

Overview
Today last price 1.2093
Today Daily Change -0.0027
Today Daily Change % -0.22
Today daily open 1.212
 
Trends
Daily SMA20 1.1682
Daily SMA50 1.1404
Daily SMA100 1.1644
Daily SMA200 1.2192
 
Levels
Previous Daily High 1.2154
Previous Daily Low 1.2048
Previous Weekly High 1.2029
Previous Weekly Low 1.171
Previous Monthly High 1.1646
Previous Monthly Low 1.0924
Daily Fibonacci 38.2% 1.2113
Daily Fibonacci 61.8% 1.2088
Daily Pivot Point S1 1.206
Daily Pivot Point S2 1.2001
Daily Pivot Point S3 1.1954
Daily Pivot Point R1 1.2166
Daily Pivot Point R2 1.2213
Daily Pivot Point R3 1.2272

 

 

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