• GBP/USD stays in green territory, though under pressure as sentiment shifts sour.
  • The US Dollar Index erases earlier gains, cushioning the Pound Sterling advance.
  •  BoE’s Bailey: Inflation is down due to energy prices falling; monetary and fiscal policy would do the rest of the job.

GBP/USD climbed above the 1.2600 figure during the early morning in the North American session after bouncing from daily lows of 1.2590 due to data portraying the UK economy’s resilience despite the Bank of England’s (BoE) tightening. The pair is trading at 1.2607, clinging to 0.10% gains at the time of writing.

BoE Bailey remains hawkish but risk-off mood, capped the GBP/USD rally

US equities are trading in the red amidst the market’s narrative that stocks are in overbought territory. Also, a weaker-than-expected Industrial Profits report from China weighed on market sentiment as deflationary pressures persisted.

The latest report from the US Census Bureau revealed that New Home Sales plunged in October due to high mortgage rates, as the US Federal Reserve (Fed) tightened monetary policy by 525 basis points since March 2022. Purchases dropped -5.6% YoY, missing estimates. The data failed to undermine the GBP/USD, which clings to gains due to a risk-off impulse.

Hence, the US Dollar Index, a measure of the buck’s value against a basket of six currencies paired with some of its earlier losses, is up 0.03%, at 103.44.

Meanwhile, the Bank of England Governor Andrew Bailey said getting inflation back to the 2% target will be “hard work,” acknowledging the recent fall from 6.7% to 4.6% is attributed to the drop in energy prices. Bailey emphasized they have to bring inflation down, even though it harms households; higher prices would worsen conditions.

Meanwhile, according to money market futures, the BoE is expected to cut rates by 25 bps in September of next year. Regarding the Fed, traders had fully priced in almost 85 bps of cuts in the next year.

GBP/USD Price Analysis: Technical outlook

From a technical perspective, the pair is neutral to upwards but has lost some steam. If the GBP/USD turns negative and prints a daily close below 1.2600, that would sponsor a leg-down in the major. The first support is at the November 24 daily low of 1.25223, followed by 1.2500. On the other hand, if the pair stays above 1.2600, further upside is expected. Buyers’ reclaiming 1.2700, could test the August 30 high at 1.2746.

GBP/USD

Overview
Today last price 1.2603
Today Daily Change -0.0008
Today Daily Change % -0.06
Today daily open 1.2611
 
Trends
Daily SMA20 1.2358
Daily SMA50 1.2265
Daily SMA100 1.2499
Daily SMA200 1.2456
 
Levels
Previous Daily High 1.2616
Previous Daily Low 1.2525
Previous Weekly High 1.2616
Previous Weekly Low 1.2446
Previous Monthly High 1.2337
Previous Monthly Low 1.2037
Daily Fibonacci 38.2% 1.2581
Daily Fibonacci 61.8% 1.2559
Daily Pivot Point S1 1.2552
Daily Pivot Point S2 1.2493
Daily Pivot Point S3 1.2461
Daily Pivot Point R1 1.2643
Daily Pivot Point R2 1.2674
Daily Pivot Point R3 1.2733

 

 

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