• GBP/USD hit multi-week lows on Friday in the low 1.2400s, with bears eyeing a push lower into the 1.2300s.
  • Near-term focus is on the upcoming US CPI release and whether it will impact Fed tightening expectations.

GBP/USD broke out to fresh multi-week lows in the 1.2420 area on Friday amid mixed FX market conditions and somewhat risk-averse pre-US inflation data trading conditions. The pair was last trading with losses of roughly 0.5% on the day, with bears eyeing a push lower into the 1.2300s in the week ahead should fears about the weakening UK economy linger.

According to a REC survey cited by Reuters on Friday, UK employers hired staff at the slowest pace since early 2021 in May, with the hiring pace having now declined for a sixth successive month. Sterling also has domestic politics to worry about, with the UK government reiterating its intention to pass legislation that would unilaterally amend the Northern Ireland Protocol (putting the UK’s free trade deal with the EU at risk) and with UK PM Boris Johnson’s authority having been weakened after a no-confidence vote on Monday that saw a larger than expected rebellion from his own MPs.

In the near-term, focus will be on US Consumer Price Inflation data scheduled for 1230GMT and analysts think that the data might ease inflation worries, which could (at the margin) relieve some pressure being felt by the Fed to tighten monetary policy so quickly in the quarters ahead. This could provide GBP/USD with some short-term support. But given Fed/BoE policy divergence and a comparatively weak UK growth story, traders may be inclined to sell any sterling rallies.

GBP/Usd

Overview
Today last price 1.243
Today Daily Change -0.0064
Today Daily Change % -0.51
Today daily open 1.2494
 
Trends
Daily SMA20 1.2512
Daily SMA50 1.2666
Daily SMA100 1.3011
Daily SMA200 1.3279
 
Levels
Previous Daily High 1.2558
Previous Daily Low 1.2487
Previous Weekly High 1.266
Previous Weekly Low 1.2458
Previous Monthly High 1.2667
Previous Monthly Low 1.2155
Daily Fibonacci 38.2% 1.2514
Daily Fibonacci 61.8% 1.2531
Daily Pivot Point S1 1.2468
Daily Pivot Point S2 1.2442
Daily Pivot Point S3 1.2397
Daily Pivot Point R1 1.2539
Daily Pivot Point R2 1.2584
Daily Pivot Point R3 1.261

 

 

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