• Renewed USD buying interest prompted some fresh selling around GBP/USD on Wednesday.
  • Stable US bond yields, a softer tone around the equity markets underpinned the greenback.
  • Investors might refrain from placing aggressive bets ahead of US consumer inflation figures.

The GBP/USD pair quickly recovered around 25 pips from daily lows and was last seen trading in the neutral territory, around the 1.3870-75 region during the early European session.

The pair witnessed some selling during the early part of the trading action on Wednesday and retreated further from three-day tops, around the 1.3925 region touched in the previous session. The downtick was exclusively sponsored by the emergence of some fresh buying around the US dollar, though lacked any strong follow-through selling.

Following the overnight pullback, the USD was back in demand and inched back closer to multi-month tops amid signs of stability in the US Treasury bond yields. The greenback was further underpinned by the optimistic US economic outlook, bolstered by the successful COVID-19 vaccine rollouts and the passage of a massive US fiscal spending bill.

Apart from this, a softer tone surrounding the equity markets further underpinned the greenback's relative safe-haven status and exerted some pressure on the GBP/USD pair. That said, the downside remains limited as investors preferred to move on the sidelines and wait for Wednesday's release of the latest US consumer inflation figures.

The reflation trade has been fueling speculations for a possible uptick in the US inflation and raised doubts that the Fed would retain ultra-low interest rates for a longer period. Hence, the US CPI report, scheduled for release later during the early North American session, will now play a key role in influencing the USD price dynamics.

In the meantime, the US bond yields would drive the greenback demand. This, along with the broader market risk sentiment, might assist traders to grab some short-term opportunities around the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3872
Today Daily Change -0.0021
Today Daily Change % -0.15
Today daily open 1.3893
 
Trends
Daily SMA20 1.3935
Daily SMA50 1.3769
Daily SMA100 1.3521
Daily SMA200 1.3183
 
Levels
Previous Daily High 1.3926
Previous Daily Low 1.3802
Previous Weekly High 1.4017
Previous Weekly Low 1.3779
Previous Monthly High 1.4243
Previous Monthly Low 1.3566
Daily Fibonacci 38.2% 1.3878
Daily Fibonacci 61.8% 1.3849
Daily Pivot Point S1 1.3821
Daily Pivot Point S2 1.375
Daily Pivot Point S3 1.3697
Daily Pivot Point R1 1.3945
Daily Pivot Point R2 1.3997
Daily Pivot Point R3 1.4068

 

 

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 stabilizes near 1.0850 following NFP-inspired selloff

EUR/USD stabilizes near 1.0850 following NFP-inspired selloff

EUR/USD came under strong bearish pressure and declined below 1.0850 as the US Dollar gathered strength on the impressive January jobs report. With Wall Street's main indexes rebounding from daily lows, however, the pair seems to have found support.

EUR/USD News

GBP/USD falls to 1.2100, looks to post large weekly losses

GBP/USD falls to 1.2100, looks to post large weekly losses

GBP/USD turned south and fell toward 1.2100 after the data from the US revealed that Nonfarm Payrolls increased by 517,000 in January. Although the US Dollar Index retreated modestly in the late American session, the pair remains on track to close the week deep in the red.

GBP/USD News

Gold extends slide to fresh mutliweek lows below $1,870

Gold extends slide to fresh mutliweek lows below $1,870

Gold price extended its slide after breaking below $1,900 and touched its lowest level since January 10 below $1,870. With the US January jobs report showing an impressive 517,000 growth in NFP, the benchmark 10-year US Treasury bond yield recovered above 3.5%, weighing heavily on XAU/USD.

Gold News

Assessing the possibility of Bitcoin price crash to $20,000 after US NFP rises to 517,000

Assessing the possibility of Bitcoin price crash to $20,000 after US NFP rises to 517,000

The United States unemployment rate for January came in at 3.4% which is lower than forecast of 3.6%. The NFP data shows that 517,000 jobs were added in January, which is much higher than the expected 185,000.

Read more

Amazon Stock Earnings: AMZN sags 5% on AWS revenue miss

Amazon Stock Earnings: AMZN sags 5% on AWS revenue miss

Amazon stock fell 5.1% afterhours on Thursday as the premier online retailer missed EPS overall for the quarter ending in December and saw growth in its cloud division drop to 20%.

Read more

Forex MAJORS

Cryptocurrencies

Signatures