GBP/USD keeps bounce off four-month low around mid-1.3000s ahead of Fed

GBP/USD extends U-turn from multi-day bottom amid sluggish markets, USD retreat.
UK announced additional sanctions on Russia, Moscow-Kyiv talks continue.
Upbeat UK jobs report underpins hopes of BOE’s successive rate hikes but the inflation woes may test the cable bulls.
Fed is up for a 0.25% rate hike, major attention is on the economic projections, Chairman Powell’s speech.

Anil Panchal FXStreet

GBP/USD treads water around 1.3040-50 amid anxious market conditions during Wednesday’s Asian session.

The cable pair snapped a three-day downtrend to bounce off the lowest levels since November 2021 following the upbeat UK jobs report. Also on the positive side was the US dollar’s retreat amid pre-Fed caution.

That said, the UK Claimant Count Change dropped to -48.1K for February, versus -31.9K prior, whereas the ILO Unemployment Rate declined below 4.0% market forecasts and 4.1% previous readouts to 3.9% for three months ended in January.

Read: UK Unemployment Rate drops to 3.9% in January vs. 4.0% expected

The US Dollar Index (DXY) declined for the first time in four days on Tuesday, down 0.05% around 98.90 by the press time, as the US Treasury yields fail to stay firmer around a multi-day high. That said, the US 10-year Treasury yields ended Tuesday unchanged despite rising to mid-2019 levels during the initial day, down two basis points (bps) to 2.142% at the latest. On the same line, the five-year bond coupon also eases from the highest levels since May 2019 marked the previous day. Further, S&P 500 Futures print mild losses despite the positive performance of Wall Street.

It’s worth noting that the recent cautious optimism surrounding the Ukraine-Russia peace talks and hopes of faster monetary policy tightening by the Bank of England (BOE) favor the GBP/USD bulls. However, fresh covid fears from China and the wider bullish expectations from the Fed challenge the pair buyers.

Looking forward, Ukraine-Russia updates, China COVID-19 news and the US Retail Sales for February, expected to ease to 0.4% from 3.8% prior, will direct the GBP/USD moves ahead of the Federal Open Market Committee (FOMC).

Read: Fed Interest Rate Decision Preview: Is history a guide?

Technical analysis

Unless crossing December’s low of 1.3160, GBP/USD remains vulnerable to visit a downward sloping support line from April 2021, around 1.2950 by the press time.

Additional important levels

Overview
Today last price	1.3042
Today Daily Change	0.0000
Today Daily Change %	0.00%
Today daily open	1.3042

Trends
Daily SMA20	1.3331
Daily SMA50	1.3466
Daily SMA100	1.3438
Daily SMA200	1.3615

Levels
Previous Daily High	1.3089
Previous Daily Low	1.3
Previous Weekly High	1.3246
Previous Weekly Low	1.3028
Previous Monthly High	1.3644
Previous Monthly Low	1.3273
Daily Fibonacci 38.2%	1.3055
Daily Fibonacci 61.8%	1.3034
Daily Pivot Point S1	1.2999
Daily Pivot Point S2	1.2956
Daily Pivot Point S3	1.2911
Daily Pivot Point R1	1.3087
Daily Pivot Point R2	1.3132
Daily Pivot Point R3	1.3176

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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