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.

Haresh Menghani FXStreet

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

Author

Haresh Menghani

FXStreet

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

EUR/USD trims gains, back below 1.1800

EUR/USD now loses some upside momentum, returning to the area below the 1.1800 support as the Greenback manages to regain some composure following the SCOTUS-led pullback earlier in the session.

GBP/USD off highs, recedes to the sub-1.3500 area

Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.