GBP/USD eyeing to reclaim 1.25 psychological mark

Haresh Menghani FXStreet

The greenback extended overnight reversal move, helping the GBP/USD major to move within striking distance of reclaiming 1.2500 psychological mark.

Currently trading around 1.2490-95 band, the pair has now recovered over 100-pips from yesterday's sub-1.2400 level and has been primarily driven by a follow through greenback retracement. The Fed Chair Janet Yellen's slightly cautious tone, during the semiannual before the House Financial Services Committee, failed to extend upbeat US economic data-led bullish sentiment surrounding the greenback and prompted investors to trim their bullish USD bets. In fact, the key US Dollar Index on Wednesday reversed early up-move to monthly highs and has now broken below 101.00 handle.

With Wednesday's reversal and subsequent recovery on Thursday, markets now seem to have digested yesterday's disappointing UK CPI print and the US Dollar price-dynamics remains an exclusive driver of the pair's movement on Thursday.

In absence of any relevant data from the UK, market participants will focus on the US economic docket featuring the release of usual weekly jobless claims, building permits, housing starts and Philly Fed manufacturing index, due later during NA session.

Technical levels to watch

Momentum above 1.2500 immediate resistance is likely to confront resistance near 1.2525-30 horizontal zone, which if cleared is likely to accelerate the up-move back towards 1.2575-80 resistance ahead of 1.2600 round figure mark.

On the downside, 1.2465 level now becomes immediate support to defend below which the pair could drop 50-day SMA support near 1.2420 region before eventually breaking back below 1.2400 handle and aim towards testing Feb. monthly lows support near 1.2350-45 region.

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 1.2408

21% Bullish
50% Bearish
29% Sideways

Bias Bearish

1 Month

Avg Forecast 1.2358

29% Bullish
53% Bearish
18% Sideways

Bias Bearish

1 Quarter

Avg Forecast 1.2142

12% Bullish
68% Bearish
20% Sideways

Bias Bearish

Author

Haresh Menghani

FXStreet

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

GBP/USD off highs, back to 1.3620

GBP/USD remains slightly on the defensive at the end of the week, receding to the low 1.3600s after hitting fresh tops past 1.3670 earlier in the day. Cable’s correction comes after two daily gains in a row and amid a tepid advance in the Greenback, while poor UK data also accompany the downside.

EUR/USD treads water below 1.1700

EUR/USD now trades with modest losses around 1.1670 following another unsuccessful atempt to advance past 1.1700 the figure in a convincing fashion. The pair’s decline follows a maginal rebound in the US Dollar as market participants continue to assess recent US data as well as developments from the US bond market.

Gold gains momentum above $4,600 on US Treasury buyback plans

Gold price (XAU/USD) gains traction to around $4,625 during the early Asian trading hours on Monday. The precious metal climbs to the highest since May 15 as the US Treasury's buyback support plan weighs on the US Dollar (USD).

Week ahead: Fed’s Jackson Hole and Nvidia earnings to dictate markets

The new Fed chair, Kevin Warsh, has made few public appearances since taking the central bank helm in May, yet he’s found it difficult to steer off controversy. Question marks about his relations with the President, Donald Trump, continue to swirl, while markets are still trying to make sense of his approach to monetary policy.

CFTC Report: Oil positioning rebounds; VIX and Yen exposure turn more bearish

The week in one sentence: Speculative positioning turned more constructive in the week to August 18. WTI recorded the largest increase, followed by a sharp narrowing in CAD net shorts. VIX and JPY positioning moved the other way, while Gold remained the clearest crowded long despite a softer spot price.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.