- GBP/USD gained some positive traction and build on the overnight bounce from sub-1.3500 levels.
- A positive risk tone, softer US bond yields undermined the safe-haven USD and extended support.
- Investors seemed to have moved on the sidelines and waited for the release of the US NFP report.
The GBP/USD pair maintained its bid tone, around the 1.3540-50 area through the first half of the European session, albeit seemed struggling to break through the 100-day SMA resistance.
Following the previous day's modest pullback and the subsequent bounce from sub-1.3500 levels, the GBP/USD pair managed to regain positive traction on Friday amid modest US dollar weakness. A generally positive tone around the equity markets was seen as a key factor that undermined the safe-haven greenback and extended some support to the major.
The British pound was further underpinned by hopes that the Omicron outbreak won't derail the UK economy and rising bets for additional interest rate hikes by the Bank of England. That said, the worsening COVID-19 situation in Britain could act as a headwind for the sterling and keep a lid on any further gains for the GBP/USD pair, at least for now.
Investors also seemed reluctant to place aggressive bets, rather preferred to wait on the sidelines ahead of Friday's release of the closely watched US monthly jobs data. The popularly known NFP report, due later during the early North American session, will be looked upon to reinforce growing market expectations about a faster policy tightening by the Fed.
It is worth recalling that the December 14-15 FOMC monetary policy meeting minutes released on Wednesday indicated that the US central bank could hike interest rates earlier than anticipated. Hence, a stronger reading would reaffirm hawkish Fed expectations, which should be enough to provide a fresh lift to the USD and prompt some selling around the GBP/USD pair.
Apart from this, the broader market risk sentiment will influence the USD price dynamics. Traders will further take cues from developments surrounding the coronavirus saga to grab some short-term opportunities around the GBP/USD pair.
Technical levels to watch
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.
Recommended content
Editors’ Picks
EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Pepe price forecast: Eyes for 30% rally
Pepe’s price broke and closed above the descending trendline on Thursday, eyeing for a rally. On-chain data hints at a bullish move as PEPE’s dormant wallets are active, and the long-to-short ratio is above one.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.