• GBP/USD remains depressed for the fourth straight session and drops closer to the monthly low.
  • The BoE's gloomy economic outlook continues to undermine sterling amid sustained USD buying.
  • The mixed UK employment data fail to impress bullish traders or provide any impetus to the pair.

The GBP/USD pair manages to defend the 1.2000 psychological mark on Tuesday and stages a modest bounce from the vicinity of the monthly low. The attempted recovery, however, lacks follow-through and the pair remains on the defensive, below the 1.2050 area through the early part of the European session.

The UK Office for National Statistics reported that the number of people claiming unemployment-related benefits fell by 10.5K in July against the 32K fall anticipated. The UK unemployment rate, meanwhile, was unchanged at 3.8% during the three months to June. This, to a larger extent, offset stronger wage growth data. The rather unimpressive data comes on the back of the Bank of England's warnings that the economy is likely to slip into recession later this year and acts as a headwind for the British pound.

The US dollar, on the other hand, gains traction for the third successive day and climbs back closer to the monthly peak amid hawkish Fed expectations. This turns out to be another factor exerting some downward pressure on the GBP/USD pair. Despite last week's softer US CPI report, Fed officials stressed that it is too soon to declare a victory on inflation and have maintained a hawkish tone. This, in turn, suggests that the Fed would stick to its policy tightening path and underpins the greenback.

Apart from this, worries about a global economic downturn offer additional support to the safe-haven buck and support prospects for a further depreciating move for the GBP/USD pair. That said, traders might refrain from placing aggressive bets and prefer to move on the sidelines ahead of the FOMC monetary policy meeting minutes, scheduled for release on Wednesday. This makes it prudent to wait for sustained weakness below the 1.2000 mark before positioning for any further near-term losses.

In the meantime, traders on Tuesday might take cues from the US economic docket - featuring the release of housing market data and Industrial Production figures. This, along with the broader market risk sentiment, might influence the USD price dynamics and produce short-term trading opportunities around the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price 1.2042
Today Daily Change -0.0012
Today Daily Change % -0.10
Today daily open 1.2054
 
Trends
Daily SMA20 1.2104
Daily SMA50 1.2129
Daily SMA100 1.2415
Daily SMA200 1.2905
 
Levels
Previous Daily High 1.2148
Previous Daily Low 1.205
Previous Weekly High 1.2277
Previous Weekly Low 1.2048
Previous Monthly High 1.2246
Previous Monthly Low 1.176
Daily Fibonacci 38.2% 1.2088
Daily Fibonacci 61.8% 1.2111
Daily Pivot Point S1 1.202
Daily Pivot Point S2 1.1986
Daily Pivot Point S3 1.1922
Daily Pivot Point R1 1.2119
Daily Pivot Point R2 1.2183
Daily Pivot Point R3 1.2217

 

 

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 Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD recovers above 0.9560 from multi-decade highs

EUR/USD recovers above 0.9560 from multi-decade highs

EUR/USD has managed to erase a portion of its daily losses after having dropped to its weakest level in over two decades at 0.9538 earlier in the day. ECB President Lagarde reiterated that they will continue to raise rates, helping the euro find some demand.

EUR/USD News

GBP/USD stays in red near 1.0700 amid risk aversion

GBP/USD stays in red near 1.0700 amid risk aversion

GBP/USD failed to build on Tuesday's modest recovery gains and dropped below 1.0650 on Wednesday. Although the pair recovered to the 1.0700 area, it is having a difficult time gathering momentum amid the risk-averse market atmosphere.

GBP/USD News

Gold remains vulnerable amid surging bond yields, USD

Gold remains vulnerable amid surging bond yields, USD

Gold staged a modest recovery from its lowest level since April 2020 touched on Tuesday, though lacked any follow-through buying. An intraday US dollar downtick was seen as a key factor that offered some support to the dollar-denominated commodity. 

Gold News

Dogecoin price provides sidelined buyers another opportunity before a 50% rally

Dogecoin price provides sidelined buyers another opportunity before a 50% rally

Dogecoin price undid its gains seen between September 21 and 24 as it came tumbling down, following the footsteps of Bitcoin price. 

Read more

TSLA jumps on delivery email

TSLA jumps on delivery email

Tesla (TSLA) stock outperformed on Tuesday as it closed at $282.94 for a gain of just over 2.5%. That marked a noted outperformance versus the main indices as the S&P 500 and Nasdaq closed either side of flat.

Read more

Forex MAJORS

Cryptocurrencies

Signatures