|

GBP/USD is subdued around 1.2200 after printing a four-week high

  • US Consumer Sentiment improved, while inflation expectations edged lower.
  • UK’s GDP for the fourth quarter contracted and flashed a gloomy economic outlook.
  • GBP/USD traders are eyeing UK CPI, Retail Sales, and US Retail Sales data.

The Pound Sterling (GBP) slid slightly vs. the US Dollar (USD) Friday, following the release of the University of Michigan (UoM) Consumer Sentiment for January in the US, which exceeded estimates, while the poll showed that inflation expectations for one-year were downward revised. At the time of writing, the GBP/USD is trading at 1.2204 after hitting a daily low of 1.2150.

GBP/USD range-bound awaiting next week’s data

The GBP/USD languished late in the European session/early New York session after printing a four-week high. Data released on Thursday flashed that inflation in the United States (US) is indeed cooling down. With December’s Consumer Price Index (CPI) dropping beneath 7% and core CPI below 6%, spurring hopes that the US Federal Reserve would shift to lower-sized rate hikes, in the amount of 25 bps.

Later, the University of Michigan (UoM) revealed that Consumer sentiment for January was better than expected, with the reading hitting 64.6 vs. forecasts of 60.5. Americans estimate inflation for one year would edge to 4%, from December’s 4.4%, while estimates for five years uptick to 3%, from 2.9%.

In the UK, the Gross Domestic Product (GDP) on a monthly basis beat estimates, rising by 0.1%, while for a three-month changed was at -0.3%, cementing the case for a gloomy economic outlook.

Looking ahead to next week, the UK economic docket will feature labor market data, the Consumer Price Index, and Retail Sales. Across the pond, the US economic docket will unveil Retail Sales, US Housing Starts, Initial Jobless Claims, and Existing Home Sales.

GBP/USD Key Technical Levels

GBP/USD

Overview
Today last price1.2204
Today Daily Change-0.0010
Today Daily Change %-0.08
Today daily open1.2214
 
Trends
Daily SMA201.2084
Daily SMA501.202
Daily SMA1001.1683
Daily SMA2001.2001
 
Levels
Previous Daily High1.2247
Previous Daily Low1.2088
Previous Weekly High1.2102
Previous Weekly Low1.1841
Previous Monthly High1.2447
Previous Monthly Low1.1992
Daily Fibonacci 38.2%1.2186
Daily Fibonacci 61.8%1.2149
Daily Pivot Point S11.212
Daily Pivot Point S21.2025
Daily Pivot Point S31.1961
Daily Pivot Point R11.2278
Daily Pivot Point R21.2342
Daily Pivot Point R31.2437

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

More from Christian Borjon Valencia
Share:

Editor's Picks

EUR/USD climbs above 1.1600 on US–Iran peace breakthrough

The EUR/USD pair stays firm above 1.1600 in the European session on Monday. The US and Iran have reached a deal to reopen the Strait of Hormuz on Sunday, which underpins risk sentiment, supporting the Euro against the US Dollar. Now, the main focus this week remains on the Fed policy decision due on Wednesday.

GBP/USD: US-Iran reaches deal supporting advance beyond 20-day EMA

The GBP/USD pair trades 0.35% higher to near 1.3460 during the late Asian trading session. The Cable extends its week-long advance as market sentiment improves further, following the announcement that the United States and Iran have reached a deal.

Gold gains momentum as US, Iran announce a peace deal

Gold price rises to a weekly high during the early European trading hours on Monday. The precious metal rebounds after the United States and Iran had reached a deal to end their conflict, easing concerns about inflation and higher interest rates.


Bitcoin consolidates gains, Ethereum defends support, XRP nears breakout trigger


Bitcoin, Ethereum and Ripple begin the week on a constructive note as the top three cryptocurrencies attempt to extend rebounds after recovering nearly 4%, 2% and 2.6%, respectively. BTC steadies around $65,600, ETH continues to hold firmly above the key $1,700 support, while XRP nears the upper boundary of the falling channel pattern. 

President Trump announced that the deal with Iran is complete
President Trump announced that the deal with Iran is complete and he authorises the toll-free opening of the Strait of Hormuz and removal of the US Naval blockade. While the agreement is made, it is expected to be signed on Friday to take effect. The Forex market looks stable and could react slowly to the positivity around the news as Iran still expresses its mistrust on the US.
4.2% headline, 0.2% core: Why the Fed's next hike may be targeting the wrong problem

May's CPI put headline inflation at 4.2% on the year, up from 3.8% in April and the hottest reading since April 2023, while core prices rose just 0.2% on the month, undershooting the 0.3% consensus and halving April's pace.