GBP/USD eases from three-day tops, up little around 1.3725 area


  • GBP/USD gained some follow-through traction for the second consecutive session on Thursday.
  • A subdued USD price action extended some support; a combination of factors capped the upside.
  • Brexit woes, COVID-19 jitters, comments by BoE’s Broadbent held bulls from placing fresh bets.

The GBP/USD pair maintained its bid tone through the first half of the European session, albeit has trimmed a part of its intraday gains and was last seen trading around the 1.3730-25 region.

The pair built on the previous day's strong rally of over 130 pips from sub-1.3600 levels and gained some follow-through traction for the second consecutive session on Thursday. The momentum was supported by a subdued US dollar price action and pushed the GBP/USD pair to the 1.3755-60 region in the last hour, though a combination of factors capped the upside.

The resurgence of the COVID-19 infections in the UK, along with the impasse over the Northern Ireland Protocol of the Brexit deal continued acting as a headwind for the British pound. In fact, new cases have been rising by more than 50,000 a day in the UK. On the Brexit front, the EU rejected the UK’s demand for a new approach to the Northern Ireland Protocol.

Apart from this, the Bank of England Deputy Governor Ben Broadbent's comments on inflation further collaborated towards keeping a lid on any strong gains for the GBP/USD pair. During a scheduled speech this Thursday, Broadbent was not convinced that current inflation should mean higher inflation in 18-24 months ahead – a more relevant time horizon for monetary policy.

The market was quick to react and pushed back expectations for a 15 bps hike by the BoE to August 2022 from May 2022. This was seen as a key factor behind a modest intraday pullback witnessed over the past hour or so. That said, the lack of any strong follow-through selling warrants some caution for bearish traders and positioning for the resumption of the recent downtrend.

Market participants now look forward to the highly-anticipated European Central Bank meeting, which might infuse some cross-driven volatility. Apart from this, the US economic docket – featuring the second-tier releases of Initial Weekly Jobless Claims and Existing Home Sales data – might influence the USD and produce some trading opportunities around the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3732
Today Daily Change 0.0020
Today Daily Change % 0.15
Today daily open 1.3712
 
Trends
Daily SMA20 1.3813
Daily SMA50 1.3986
Daily SMA100 1.3927
Daily SMA200 1.3706
 
Levels
Previous Daily High 1.3723
Previous Daily Low 1.3591
Previous Weekly High 1.391
Previous Weekly Low 1.3761
Previous Monthly High 1.4249
Previous Monthly Low 1.3787
Daily Fibonacci 38.2% 1.3673
Daily Fibonacci 61.8% 1.3642
Daily Pivot Point S1 1.3628
Daily Pivot Point S2 1.3543
Daily Pivot Point S3 1.3496
Daily Pivot Point R1 1.376
Daily Pivot Point R2 1.3807
Daily Pivot Point R3 1.3892

 

 

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 clings to 1.18 ahead of all-important ECB meeting

EUR/USD is hovering around 1.18 as the clock ticks down to the ECB's first policy announcement after unveiling its more dovish strategic review. ECB President Lagarde is set to make changes to communications and perhaps to policy. Covid headlines are eyed.

EUR/USD News

GBP/USD jumps to 1.3750, dismissing Brexit, covid concerns

GBP/USD is trading around 1.3750, extending its rebound from five-month lows. Sterling has shrugged off a growing EU-UK row over the Northern Irish protocol and persistently high covid figures in the UK.

GBP/USD News

Gold awaits acceptance below $1795 for further downside, ECB in focus

After peaking at $1814 in the Asian trading, gold price remained heavy for the most part of Wednesday, falling as low as $1795 before recapturing $1800 on closing. Daily technical setup continues to flag bearish risks for gold.

Gold News

SafeMoon price needs to rally 14% to kick-start an uptrend

SafeMoon price is currently attempting to push toward the range low in hopes of reclaiming it. If successful, the bulls need to set up a higher high to trigger an uptrend.  While not impossible, an ascent in the market value of SAFEMOON will likely face delays.

Read more

ECB Preview: Three reasons why Lagarde could hit the euro when it is down

Sell low, cover even lower – that could be the best strategy for trading the European Central Bank's upcoming decision with EUR/USD. While the common currency has been holding up better than some of its peers, this could be due to pre-ECB tensions rather than any material advantage. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures