• GBP/USD meets with a fresh supply on Friday and retreats further from the post-US CPI swing high.
  • The BoE’s bleak outlook undermines the GBP and acts as a headwind amid a modest USD strength.
  • The better-than-expected UK macro data does little to impress bulls or lend support to the major.

The GBP/USD pair turns lower for the second successive day on Friday and moves further away from the weekly high, around the 1.2275 area touched in the aftermath of the softer US CPI report. The steady intraday descent drags spot prices to a two-day low, around the 1.2170-1.2165 region during the first half of the European session.

The US dollar gains some positive traction on the last day of the week, which, in turn, attracts fresh selling around the GBP/USD pair. Despite the latest signs of easing US inflation, the recent hawkish comments by several Fed officials suggest that the US central bank would tighten its monetary policy further. The prospects for additional rate hikes by the Fed push the US Treasury bond yields to a multi-week high and offers some support to the greenback.

The British pound, on the other hand, continues to be undermined by the Bank of England's gloomy economic outlook. It is worth recalling that the UK central bank last week painted a particularly bleak picture and indicated that a prolonged recession in Britain would start in the fourth quarter. This, to a larger extent, offsets Friday's mostly better-than-expected UK macroeconomic releases and does little to impress bullish traders or lend any support to the GBP/USD pair.

Market participants, however, remain divided over the size of the next rate hike by the Fed. This, along with the risk-on impulse, seems to cap gains for the safe-haven USD and offers some support to the GBP/USD pair. Nevertheless, the fundamental backdrop favours bearish traders and supports prospects for a further depreciating move. Traders now eye the Preliminary Michigan US Consumer Sentiment Index for a fresh impetus later during the early North American session.

Technical levels to watch

GBP/USD

Overview
Today last price 1.2177
Today Daily Change -0.0025
Today Daily Change % -0.20
Today daily open 1.2202
 
Trends
Daily SMA20 1.2085
Daily SMA50 1.2146
Daily SMA100 1.2435
Daily SMA200 1.292
 
Levels
Previous Daily High 1.2249
Previous Daily Low 1.2182
Previous Weekly High 1.2294
Previous Weekly Low 1.2003
Previous Monthly High 1.2246
Previous Monthly Low 1.176
Daily Fibonacci 38.2% 1.2208
Daily Fibonacci 61.8% 1.2224
Daily Pivot Point S1 1.2173
Daily Pivot Point S2 1.2144
Daily Pivot Point S3 1.2106
Daily Pivot Point R1 1.224
Daily Pivot Point R2 1.2278
Daily Pivot Point R3 1.2307

 

 

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