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GBP/USD dips amidst escalating Middle East conflict, volatile market conditions

  • GBP/USD sheds 0.12%, reversing from 1.2163 to 1.2112, as the Middle East conflict escalates.
  • Gold prices surge past $2,000, reflecting heightened market volatility and risk-off sentiment.
  • Upcoming UK and US economic releases, including PMIs and monetary policy decisions, to provide further direction.

GBP/USD registers minimal losses of 0.12% after hitting a daily high of 1.2163 on risk appetite, but news headlines showing an escalation of the Middle East conflict weighed on the major. Therefore, the pair reversed its course trades at 1.2112, as sellers eye a test of 1.2100.

Pair reverses course from daily high as geopolitical tensions weigh on market sentiment

Volatility is the game's name, as shown by Gold prices climbing past $ 2,000 for the first time since May 16, 2023. News that Israel intensified its ground offensive in Gaza, destroying communications and Internet services in Palestina, according to Pallet, the Palestinian telecommunications company. Meanwhile, military Israeli authorities commented that they “have intensified attacks on Gaza. The Air Force is widely attacking subterranean targets and terror targets in a significant fashion.”

Reactions across the globe emerged, with the US urging Israel to stop a “full-scale” invasion, instead using a surgical approach using aircraft and special operation forces.

Aside from this, US economic data revealed earlier depicts inflation continues to ease, but it’s struggling to drop below the 3% threshold. The Fed’s preferred gauge for inflation, the Core PCE, ticked down from 3.8% to 3.7% YoY in September, while PCE was unchanged compared to August 3.4%.

Recently, the University of Michigan revealed that Consumer Sentiment slightly improved, but inflation expectations deteriorated. For a one-year period, Americans expect prices to rise by 4.2%, while for a five-year period, are expected to stay at 3%.

Next week, the UK economic docket will feature FS&P Global/CIPS PMIs alongside the Bank of England monetary policy decision. On the US front, the calendar would reveal the Conference Board Consumer Confidence, S&P Global and ISM Manufacturing PMIs, US Nonfarm Payrolls, and the US Federal Reserve monetary policy decision.

GBP/USD Technical Levels

GBP/USD

Overview
Today last price1.2118
Today Daily Change-0.0011
Today Daily Change %-0.09
Today daily open1.2129
 
Trends
Daily SMA201.2179
Daily SMA501.2364
Daily SMA1001.2575
Daily SMA2001.2441
 
Levels
Previous Daily High1.214
Previous Daily Low1.207
Previous Weekly High1.222
Previous Weekly Low1.209
Previous Monthly High1.2713
Previous Monthly Low1.2111
Daily Fibonacci 38.2%1.2113
Daily Fibonacci 61.8%1.2097
Daily Pivot Point S11.2086
Daily Pivot Point S21.2043
Daily Pivot Point S31.2016
Daily Pivot Point R11.2156
Daily Pivot Point R21.2183
Daily Pivot Point R31.2226

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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