|

GBP/USD consolidates in a range around 1.2200 mark as traders await fresh catalyst

  • GBP/USD lacks any firm direction and oscillates in a narrow trading range on Thursday.
  • Subdued USD demand lends some support, though recession fears seem to cap the pair.
  • Traders also seem reluctant ahead of the crucial FOMC/BoE policy meetings next week.

The GBP/USD pair struggles to capitalize on the overnight recovery from the 1.2100 neighbourhood, or the weekly low and oscillates in a range through the early European session on Thursday. The pair is currently trading around the 1.2200 round-figure mark, nearly unchanged for the day.

The latest optimism over the easing of COVID-19 curbs in China is seen undermining the safe-haven US Dollar, which, in turn, offers some support to the GBP/USD pair. That said, rebounding US Treasury bond yields, along with growing recession fears, should act as a tailwind for the greenback. Traders might also refrain from placing aggressive bets amid the uncertainty over the Fed's rate-hike path.

Market participants seem convinced that the US central bank will slow the pace of its policy tightening and have been pricing in a greater chance of a smaller 50 bps rate hike in December. That said, the incoming positive US macro data suggested that the economy remained resilient despite rising borrowing costs and fueled speculations that the Fed might lift rates more than recently projected.

Hence, the focus will remain glued to the FOMC monetary policy meeting on December 13-14, which will be followed by the Bank of England (BoE) meeting on Thursday. The UK central bank is expected to hike rates by 50 bps, though some analysts anticipate a larger 75 bps move. Nevertheless, the crucial central bank decisions should provide a fresh directional impetus to the GBP/USD pair.

In the meantime, a bleak outlook for the UK economy might hold back bulls from placing aggressive bets around the British pound amid absent relevant domestic macro data. The US economic docket, meanwhile, features the release of the usual Weekly Initial Jobless Claims. This, along with the US bond yields and the broader risk sentiment, will drive the USD and influence the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price1.2203
Today Daily Change-0.0010
Today Daily Change %-0.08
Today daily open1.2213
 
Trends
Daily SMA201.1992
Daily SMA501.1588
Daily SMA1001.1662
Daily SMA2001.2131
 
Levels
Previous Daily High1.2235
Previous Daily Low1.2107
Previous Weekly High1.2311
Previous Weekly Low1.19
Previous Monthly High1.2154
Previous Monthly Low1.1147
Daily Fibonacci 38.2%1.2186
Daily Fibonacci 61.8%1.2156
Daily Pivot Point S11.2135
Daily Pivot Point S21.2057
Daily Pivot Point S31.2007
Daily Pivot Point R11.2263
Daily Pivot Point R21.2313
Daily Pivot Point R31.239

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Editor's Picks

GBP/USD revisits 1.3530; Dollar pushes harder

GBP/USD adds to the weekly correction and recedes toward the 1.3530 zone on Friday. Indeed, Cable faces increasing selling pressure on the back of extra gains in the Greenback, particularly fuelled by Chair Warsh’s speech at the Jackson Hole Symposium and the US NFP Annual Revision (-79K).

EUR/USD breaches below 1.1600, multi-day lows

EUR/USD now accelerates its decline and retreats to seven-day troughs in the sub-1.1600 region at the end of the week. The pair’s pullback comes on the back of the strong rebound in the US Dollar after Chair Warsh delivered a hawkish message in Jackson Hole, while the US NFP Annual Revision came in at -79K.

Gold challenges its 200-day SMA near $4,530

Gold’s decline gathers fresh steam, hitting weekly lows while disputing its critical 200-day SMA near $4,530 per troy ounce. The yellow metal’s increasing weakness comes in response to the generalised upbeat tone in the US Dollar and the widespread rebound in US Treasury yields, as investors continue to reprice a Fed rate hike in September.

Crypto Today: Bitcoin, Ethereum, XRP rally loses steam despite steady ETF inflows

Bitcoin is back below $80,000 at the time of writing on Friday, after a second attempt at breaking resistance between $81,000 and $82,000. Meanwhile, Ethereum and Ripple mirror Bitcoin’s cooling trend, with ETH sliding to $2,500 and XRP falling toward $1.40 support.

Week ahead – RBNZ and BoC decide on rates ahead of all-important US NFP

Dollar rebounds ahead of ISM PMI and NFP data. RBNZ is expected to raise rates; focus to fall on forward guidance. BoC is set to remain on hold; will it raise rates in 2027?

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.