GBP/USD hit five-month highs above 1.2300 as DXY tumbles
- US Dollar Index is down by 0.90%, at lowest in almost four months.
- Pound also rises sharply versus the Euro on Thursday.
- GBP/USD heads for the first close above the 200-day SMA since September 2021.
The GBP/USD is having the best day in weeks, boosted by a weaker US Dollar across the board. The pound is also rising versus the Euro. Cable peaked at 1.2310, the highest since June and then pulled back to 1.2260.
During the last hours, the US Dollar trimmed losses but it is still sharply lower, after extending the slide that started on Wednesday following Fed Chair Jerome Powell's speech. Fed officials sign that at the December meeting rates will be raised again but at a slower pace.
Expectations about a less hawkish are pushing the Dollar sharply lower. Economic data released on Thursday showed easing inflation signs (declines in the Core PCE and the Prices Paid Index of the ISM Manufacturing) and weakening conditions in the Manufacturing sector (ISM Manufacturing fell in November to 49).
Beyond the Dollar's weakness, the Pound is also rising versus the Euro. The EUR/GBP broke below the 0.8570 critical support, and fell so far to 0.8552, the lowest since August 30.
Above the 200-day SMA
The GBP/USD is on its way to the first close above the 200-day Simple Moving Average (today at 1.2150) another positive technical development for the bulls. So far, spot price has been unable to consolidate above 1.2300 that is the resistance level to break; if it manages to do it would open the doors to more gains.
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
