GBP/USD eases from one-week highs, up little below mid-1.3400s


  • GBP/USD shot to a one-week high in reaction to hotter-than-expected UK CPI print.
  • Bulls struggled to find acceptance above 100-hour SMA amid persistent Brexit woes.
  • Fed rate hike bets acted as a tailwind for the USD and also collaborated to cap gains.

The GBP/USD pair surrendered a major part of the stronger UK CPI-inspired gains and was last seen trading below mid-1.3400s, still up nearly 0.15% for the day.

Having shown some resilience below the 1.3400 mark, the GBP/USD pair regained positive traction on Wednesday and shot to a one-week high in reaction to hotter-than-expected UK CPI print. The UK Office for National Statistics (ONS) reported that consumer prices surged to 4.2% in October, marking the fastest pace since December 2011.

Against the backdrop of Tuesday's upbeat UK employment details, the data reassured expectations for an imminent rate hike by the Bank of England in December and provided a strong lift to the British pound. Apart from this, the intraday US dollar pullback from a 16-month peak further provided an additional boost to the GBP/USD pair.

Bulls, however, struggled to capitalize on the move or find acceptance above the 200-hour SMA amid worries that the UK government could trigger Article 16 of the Northern Ireland Protocol. The intraday uptick ran out of the steam near the 1.3470-75 region, which should now act as a key pivotal point for the GBP/USD pair's near-term trend.

Meanwhile, the prospects for an early policy tightening and elevated US Treasury bond yields continued lending some support to the greenback. In fact, the markets have been pricing in the possibility for an eventual Fed rate hike move by July 2022. This was seen as another factor that collaborated to cap any meaningful upside for the GBP/USD pair.

Looking at the broader picture, the emergence of fresh selling at higher levels warrants some caution before positioning for any meaningful appreciating move. A subsequent slide back below the 1.3400 mark will be seen as a fresh trigger for bearish traders and turn the GBP/USD pair vulnerable to challenge YTD lows, around mid-1.3300s touched last Friday.

Technical levels to watch

GBP/USD

Overview
Today last price 1.344
Today Daily Change 0.0018
Today Daily Change % 0.13
Today daily open 1.3422
 
Trends
Daily SMA20 1.3611
Daily SMA50 1.3651
Daily SMA100 1.3729
Daily SMA200 1.384
 
Levels
Previous Daily High 1.3473
Previous Daily Low 1.3405
Previous Weekly High 1.3607
Previous Weekly Low 1.3353
Previous Monthly High 1.3834
Previous Monthly Low 1.3434
Daily Fibonacci 38.2% 1.3447
Daily Fibonacci 61.8% 1.3431
Daily Pivot Point S1 1.3394
Daily Pivot Point S2 1.3366
Daily Pivot Point S3 1.3327
Daily Pivot Point R1 1.3462
Daily Pivot Point R2 1.3501
Daily Pivot Point R3 1.3529

 

 

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD stays pressured as shares slump on Powell's hawkish rhetoric

EUR/USD bears stay in control as Asian shares take a plunge. The Fed's hawkishness is reverberating throughout global markets, weighing on risk-sensitive currencies. The US dollar is bid in Asia and risk aversion remains in play.

EUR/USD News

GBP/USD refreshes monthly low under 1.3450 as Fed, Brexit and UK politics favor bears

GBP/USD takes offers to renew monthly low, down for the second consecutive day. EU to sue UK over deal in bonkers, delay in Brexit talks over NI. Sue Grey's report awaited as UK PM Johnson defends drinks party, animal evacuation from Afghanistan adds to the problems.

GBP/USD News

Gold bears await US Q4 GDP for the next leg lower Premium

Gold price is licking its wounds near weekly lows of $1,813, as bears take a breather in the aftermath of the Fed decision while waiting for the US advance Q4 GDP and Durable goods data. The US economy is likely to have regained steam in Q4, 2021.

Gold News

Why Bitcoin price could form a bottom following the January 28 options expiry

Bitcoin open interest volume by expiry date indicates a majority of bearish sentiment in the market. BTC options worth roughly $2 billion will expire by the end of this week. However, options expiry has correlated with massive liquidations and price crashes in the past.

Read more

US GDP Preview: Inflation component could steal the show, boost dollar. Premium

More than double than pre-pandemic – the 5% annualized growth rate expected for the fourth quarter is a reason to be cheerful. That may boost the dollar, but not stocks, which are wary of tighter monetary policy from the Fed.

Read more

Forex MAJORS

Cryptocurrencies

Signatures