• GBP/USD gained strong follow-through traction on Thursday and shot to a fresh multi-month high.
  • The post-US CPI USD selling remained unabated and was seen as a key factor fueling the momentum.
  • The UK political drama might cap gains amid slightly overbought conditions and ahead of Brexit talks.

The GBP/USD pair caught fresh bids during the early European session and shot to the highest level since October 29, around the 1.3745 region in the last hour.

Following a brief consolidation earlier this Thursday, the GBP/USD pair regained positive traction and scaled higher for the third successive day. The momentum was sponsored by the post-US CPI selling pressure surrounding the US dollar, which remained unabated through the first half of the trading.

Given that the markets have fully priced in a March Fed rate hike, a surge in the US CPI was taken as a “sell the fact” opportunity and prompted aggressive USD long-unwinding on Wednesday. Even rebounding US Treasury bond yields and a softer risk tone did little to lend any support to the safe-haven USD.

Apart from this, the ongoing positive move could further be attributed to technical buying following the previous day's sustained breakthrough a descending trend-line resistance extending from July. Bulls seemed unaffected and shrugged off the latest political development in the United Kingdom.

The chances of UK Prime Minister Boris Johnson resigning are rising amid calls from within the Conservative party after an admission that he attended a party when gatherings were not allowed in England. This could act as a headwind for the British pound ahead of key Brexit talks on Thursday.

Even from a technical perspective, the RSI (14) on the daily chart has started flashing near-term overbought conditions. This further warrants some caution for aggressive bullish traders and before positioning for an extension of the recent appreciating move witnessed since December 20.

In the absence of any major market-moving economic releases from the UK, traders might take cues from the US economic docket – featuring the Producer Price Index and Weekly Jobless Claims. This, along with Fed Governor Lael Brainard's testimony on her nomination as Vice-Chair, will influence the USD.

Traders will further take cues from any Brexit-related headlines, which might further contribute to producing some meaningful trading opportunities around the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3738
Today Daily Change 0.0027
Today Daily Change % 0.20
Today daily open 1.3711
 
Trends
Daily SMA20 1.3461
Daily SMA50 1.3398
Daily SMA100 1.3554
Daily SMA200 1.3738
 
Levels
Previous Daily High 1.3714
Previous Daily Low 1.3621
Previous Weekly High 1.3599
Previous Weekly Low 1.3431
Previous Monthly High 1.355
Previous Monthly Low 1.3161
Daily Fibonacci 38.2% 1.3679
Daily Fibonacci 61.8% 1.3657
Daily Pivot Point S1 1.365
Daily Pivot Point S2 1.3588
Daily Pivot Point S3 1.3556
Daily Pivot Point R1 1.3743
Daily Pivot Point R2 1.3776
Daily Pivot Point R3 1.3837

 

 

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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD falls toward 0.9600 amid renewed dollar strength

EUR/USD falls toward 0.9600 amid renewed dollar strength

EUR/USD has turned south and declined toward 0.9600 in the second half of the day on Monday. A sharp decline witnessed in the GBP/USD pair and the souring market mood provided a boost to the dollar, lifting the US Dollar Index back above 114.00. 

EUR/USD News

GBP/USD falls below 1.0700 following BoE statement

GBP/USD falls below 1.0700 following BoE statement

GBP/USD came under renewed bearish pressure and slumped below 1.0700 during the American trading hours. In a statement published on Monday, the Bank of England said that they welcome the government's commitment to sustainable economic growth, triggering another GBP selloff.

GBP/USD News

Gold could soon challenge the $1,600 level

Gold could soon challenge the $1,600 level

Demand for the dollar continued at the beginning of the week, resulting in XAUUSD plummeting to $1,626.67, its lowest since April 2020. Concerns about potential recessions undermined the dismal market’s mood, pushing the greenback higher despite its extreme overbought conditions.

Gold News

Bitcoin: Investors need to prepare for volatile breakout

Bitcoin: Investors need to prepare for volatile breakout

Bitcoin price has been devoid of volatility for the last week and has been in a tight consolidation without directional bias whatsoever. This range bound move has formed a triangle pattern which could break either way. 

Read more

Three stocks that will be in the news this week: Amazon, Nike, Micron Technology

Three stocks that will be in the news this week: Amazon, Nike, Micron Technology

The S&P 500 index lost 4.1% last week and left traders melancholy with another week to go in this dreadful September. The S&P 500 index is down 6.6% so far in the month that is already known for poor performance, and most seem to think the pain will continue. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures