GBP/USD hits 1.2550 amid low trading volume

GBP/USD trades near 1.2570 as volume remains low during the holiday week.
The US Dollar Index DXY stays stable around 108.15, showing little movement.
Fed's gradual interest rate cuts expectations weigh on the Greenback.

Patricio Martín FXStreet

The GBP/USD pair has seen a modest rise to 1.2550, as low trading volume characterizes the market this week due to the upcoming Christmas holidays. The pair has been consolidating, with minimal price action as the market adjusts to a quiet holiday period. Similarly, the US Dollar Index (DXY) is largely flat, hovering above 108.00, showing no significant changes as traders await further economic data.

In the broader picture, the US Dollar maintains a strong footing. Expectations for a slower pace of interest rate cuts from the Federal Reserve in the coming year continue to support the Greenback. Fed officials are signaling a more cautious approach to reducing rates, a shift influenced by a slower-than-expected disinflationary process and ongoing uncertainties around new policies under President-elect Donald Trump. The latest Fed projections suggest that the federal funds rate could fall to 3.9% by the end of 2025, hinting at several rate cuts next year but less than the markets expected before last week’s decision.

Looking at the economic calendar, Initial Jobless Claims data will be released on Thursday, with the number of new claims expected to decline slightly to 218K. This could provide some volatility for the US Dollar. However, despite these factors, the Pound remains vulnerable, having fallen below the key upward-sloping trendline around 1.2600, and showing signs of potential further downside. Later on, in the first week of January, Nonfarm Payrolls figures from December from the US will be closely looked upon.

GBP/USD Technical Outlook

GBP/USD continues to face significant downside pressure. In addition, the Relative Strength Index (RSI) has dipped below the 40.00 mark, which increases the likelihood of further downside momentum if it stays below this level. Moreover, the Moving Average Convergence Divergence (MACD) prints red bars which suggests a strong presence of the bears.
On the downside, the next support level for GBP/USD is seen around the 1.2300. On the upside if the pair can recover the 1.2600 mark, it could be a recovery, this level will be a crucial point to watch for any potential upside momentum.

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

EUR/USD turns negative around 1.1600

EUR/USD is once again under selling pressure, sliding back towards the key 1.1600 support area amid a renewed upswing in the US dollar. The greenback has gathered further momentum after President Trump voiced praise for Kevin Hassett in connection with the Fed chair role.

GBP/USD trims gains, back below 1.33400

The current rebound in the Greenback prompts GBP/USD to surrender a big chunk of its earlier gains and slip back below the key 1.3400 mark on Friday. The marked bounce in the US Dollar followed the markets’ reaction to the likelihood that K. Hasset could become the next Fed Chief.

Gold weakens below $4,600 on USD rebound

Gold adds to Thursday’s small decline and breaks below the $4,600 mark per troy ounce at the end of the week. The precious metal’s corrective move comes on the back of easing geopolitical tensions and the late improvement in the Greenback.

Crypto Today: Bitcoin, Ethereum, XRP hold support amid waning retail demand

Bitcoin slips but holds above $95,000, weighed down by declining retail demand. Ethereum trades narrowly between the 100-day EMA support and the 200-day EMA resistance. XRP edges lower for the third consecutive day, driven by a persistently weakening derivatives market.

Week ahead – US PCE and Davos in focus for Dollar traders – BoJ meets

US PCE, PMIs and remarks from Davos could impact Fed cut bets. BoJ to stand pat; focus to fall on guidance after election reports. UK CPI and retail sales data may confirm bets of more BoE cuts.

Dash Price Forecast: DASH defies headwinds, paces toward $100

Dash extends its rally, reaching an intraday high of $96.85 despite the broader crypto market correcting. Retail interest in DASH explodes as futures Open Interest soars to $165 million.