- GBP/USD holds onto recovery moves from yearly low.
- France step-back on Brexit battle but it’s not fishing, traders push-back BOE rate hike calls to 2022 on more Omicron cases in UK.
- UK/US PMIs, ADP Employment Change will decorate calendar.
- Fed’s Powell, BOE’s Bailey and virus updates are important too.
GBP/USD picks up bids to refresh intraday top around 1.3325 heading into Wednesday’s London open. The cable pair refreshed yearly low on Tuesday before closing November with static daily performance and the heaviest monthly fall since last September.
The cable pair traders initially feared the South African variant of the coronavirus, dubbed as Omicron, as the UK’s count of the feared virus strain jumped to 22. The same pushed the CME’s BOEWatch Tool to portray market forecasts of no rate hike actions from the Bank of England (BOE).
Even so, a Brexit-positive headline from France, shared by Bloomberg, seems to have joined the month-end consolidation to favor GBP/USD buyers afterward. “France is preparing to offer Boris Johnson proposals for an agreement with the European Union on migration, less than a week after Emmanuel Macron slammed the UK Premier for not taking the issue seriously enough,” said Bloomberg.
On the other hand, Fed Chair Jerome Powell trigged a bounce in the US Treasury yields from a two-month low by suggesting extended inflation fears and discussion over faster taper in the December meeting. It’s worth noting that the mixed US data and mixed chatters over the prevailing vaccines’ capacity to tame the newly found COVID-19 variant join cautious optimism in China and receding virus cases from South Africa to favor GBP/USD buyers of late.
Moving on, the final readings of the Markit PMIs for November may offer intermediate clues but attention will be given to the US ISM Manufacturing PMI for clear direction. Further, US ADP Employment Change and Fed Chair Jerome Powell’s testimony 2.0, as well as BOE Governor Andrew Bailey’s speech, will be crucial too.
Technical analysis
The GBP/USD pair’s corrective pullback seems to take clues from Tuesday’s bullish Doji candlestick at the multi-day low. However, bearish MACD signals and convergence of the 10-DMA and one-month-old descending trend line, around 1.3360, challenge the bulls.
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 recovery below 1.0700 amid upbeat mood
EUR/USD is consolidating its recovery but remains below 1.0700 in early Europe on Thursday. The US Dollar holds its corrective decline amid a stabilizing market mood, despite looming Middle East geopolitical risks. Speeches from ECB and Fed officials remain on tap.
GBP/USD advances toward 1.2500 on weaker US Dollar
GBP/USD is extending recovery gains toward 1.2500 in the European morning on Thursday. The pair stays supported by a sustained US Dollar weakness alongside the US Treasury bond yields. Risk appetite also underpins the higher-yielding currency pair. ahead of mid-tier US data and Fedspeak.
Gold appears a ‘buy-the-dips’ trade on simmering Israel-Iran tensions
Gold price attempts another run to reclaim $2,400 amid looming geopolitical risks. US Dollar pulls back with Treasury yields despite hawkish Fedspeak, as risk appetite returns.
Manta Network price braces for volatility as $44 million worth of MANTA is due to flood markets
Manta Network price is defending support at $1.80 as multiple technical indicators flash bearish. 21.67 million MANTA tokens worth $44 million are due to flood markets in a cliff unlock on Thursday.
Investors hunkering down
Amidst a relentless cautionary deluge of commentary from global financial leaders gathered at the International Monetary Fund and World Bank Spring meetings in Washington, investors appear to be taking a hiatus.