• GBP/USD bulls take a breather at multi-day top as the key week begins.
  • Sunak unveils plan to cut income tax in long-term, Truss gets UK Chancellor Zahawi’s formal endorsement as PM.
  • Recession fears, Fed’s Powell weighed on the USD even as inflation data came in firmer.
  • PMIs can entertain traders ahead of BOE, US jobs report for Thursday.

GBP/USD prices grind higher as it begins the key week comprising the Bank of England (BOE) monetary policy meeting and the US employment data for July. That said, the cable pair rose during the last two consecutive weeks amid a softer US dollar, as well as political optimism in the UK.

Recently, ex-UK Chancellor Rishi Sunak vows a 20% income tax cut by 2029 in a bid to become the next British Prime Minister. However, Reuters showed the latest results of the YouGov poll that showed Foreign Minister Liz Truss held a 24-point lead over Sunak among Conservative Party members. It’s worth noting that the UK Telegraph came out with the news suggesting current Chancellor Nadhim Zahawi formally endorse Liz Truss to be the next Conservative Party Leader. Given that both contestants have sound plans and no major political negative, except for Truss’ strong Brexit support, the cable cheers the hopes of better days after multiple political hiccups in the past.

Elsewhere, the US Dollar Index (DXY) marked the second consecutive weekly fall after the US Federal Reserve (Fed) Chairman Jerome Powell highlighted data-dependency and neutral rates. Also drowning the greenback was the “technical recession” in the US after the Annualized readings of the US Q2 Gross Domestic Product (GDP) dropped for the second straight quarter.

Even so, comments from the uber dove Minneapolis Fed President Neil Kashkari and the Fed’s preferred inflation gauge appeared to have probed the greenback bears of late. “The fed is still a long way away from backing off rate hikes,” said Fed’s Kashkari to the New York Times (NYT). The policymaker added, “Hiking rates by half a point at coming Fed meetings seems reasonable to me.” Furthermore, the US Core Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred gauge of inflation, rose to 4.8% YoY for June versus 4.7% prior.

It should be noted that the easing fears of the tighter rate hikes joined mixed US data to help Wall Street witness another positive week while the US Treasury yields closed on a softer side by the end of Friday.

On a different page, the US-China tussles escalate as Beijing warns the White House over US House Speaker Nancy Pelosi’s plan to visit Taiwan. Also, US President Joe Biden got a covid infection and offer an additional burden for the risk appetite.

Looking forward, multiple PMIs to entertain the GBP/USD traders ahead of the BOE’s “Super Thursday” and Friday’s US Nonfarm Payrolls (NFP). Given the recently firmer sentiment and the market’s move against the US dollar, hawkish BOE could have a more positive impact on the Cable pair than previously. That said, the “Old Lady” is expected to announce a 0.25% rate hike but the market does anticipate a stronger move.

Also read: GBP/USD Weekly Forecast: Bulls on the lookout for 1.2500 ahead of BOE, NFP

Technical analysis

Despite breaking the 14-week-old resistance line, which now support around 1.2075, GBP/USD buyers need validation from the 50-DMA hurdle of 1.2210 to keep reins. That said, RSI (14) and MACD are both in favor of the upside momentum of late.

Additional important levels

Overview
Today last price 1.217
Today Daily Change -0.0009
Today Daily Change % -0.07%
Today daily open 1.2179
 
Trends
Daily SMA20 1.1994
Daily SMA50 1.2223
Daily SMA100 1.2525
Daily SMA200 1.2989
 
Levels
Previous Daily High 1.2246
Previous Daily Low 1.2063
Previous Weekly High 1.2246
Previous Weekly Low 1.196
Previous Monthly High 1.2617
Previous Monthly Low 1.1934
Daily Fibonacci 38.2% 1.2176
Daily Fibonacci 61.8% 1.2133
Daily Pivot Point S1 1.2079
Daily Pivot Point S2 1.198
Daily Pivot Point S3 1.1896
Daily Pivot Point R1 1.2262
Daily Pivot Point R2 1.2346
Daily Pivot Point R3 1.2445

 

 

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

AUD/USD losing bullish steam as concerns weigh

AUD/USD losing bullish steam as concerns weigh

Wall Street trimmed its recent gains and approaches weekly lows, reflecting persistent market fears. AUD/USD turned south and risks additional slides as China is set to unveil growth-related figures.

AUD/USD News

EUR/USD corrective advance extends towards 0.9800

EUR/USD corrective advance extends towards 0.9800

The EUR/USD pair advanced for a second consecutive day, now trading a handful of pips below the next big figure. With no real reasons to buy the EUR, the movement seems more related to profit-taking.

EUR/USD News

Gold consolidating weekly gains amid broad dollar’s weakness

Gold consolidating weekly gains amid broad dollar’s weakness

XAUUSD trades around $1,660, pressuring the weekly high. The metal fell to an intraday low of $1,641.46 but resumed its advance as investors keep moving away from the safe-haven currency. The market´s mood is far from optimistic. 

Gold News

Bitcoin price ruptures $19,000 support oblivious to ballooning BTC/GBP’s trading volume

Bitcoin price ruptures $19,000 support oblivious to ballooning BTC/GBP’s trading volume

BTC appears to be playing games with investors in move that see price action repeatedly undermined. Earlier in the week, the flagship cryptocurrency jumped to $20,200 but immediately snapped out of the northbound move to test support at $18,500.

Read more

US August PCE Inflation Preview: Will it trigger a dollar correction? Premium

US August PCE Inflation Preview: Will it trigger a dollar correction?

The US Bureau of Economic Analysis will release the Personal Consumption Expenditures (PCE) Price Index data, the US Federal Reserve’s preferred gauge of inflation, for August on Friday, September 30.

Read more

Forex MAJORS

Cryptocurrencies

Signatures