GBP/USD pares intraday losses, keeps the red below mid-1.3700s


  • GBP/USD found some support ahead of the 1.3700 mark and stalled its intraday decline.
  • BoE rate hike expectations, weaker USD helped attract some dip-buying at lower levels.
  • Brexit jitters capped any further gains amid a break below ascending channel support.

The GBP/USD pair quickly recovered around 30-35 pips from daily lows and was last seen trading with modest losses, just below mid-1.3700s.

The pair extended the previous day's sharp retracement slide from the 1.3825-30 resistance zone and witnessed heavy selling during the first half of the trading action on Wednesday. The downward trajectory drag the GBP/USD pair to over one-week lows during the mid-European session, though lacked follow-through selling.

The intraday bounce followed the UK finance minister Rishi Sunak's upbeat economic assessment while presenting the annual government budget. Office for Budget Responsibility (OBR) sees UK GDP will return to the pre-crisis level at the turn of the year and expand 6.5% in 2021. OBR forecasts show GDP growth of 6% and CPI of 4% in 2022.

This reinforced market expectations about an imminent Bank of England rate hike move at the upcoming policy meeting next week and extended some support to the British pound. This, along with the emergence of fresh selling around the US dollar, assisted the GBP/USD pair to find decent support ahead of the 1.3700 mark.

The USD was pressured by an extension of the recent decline in the US Treasury bond yields, which fell for the fourth successive day. In fact, the yield on the benchmark 10-year US government bond slipped below the 1.60% threshold and undermined the greenback, which failed to gain any traction following the release of Durable Goods Orders.

Despite the supporting factors, the attempted recovery witnessed around the GBP/USD pair lacked bullish conviction amid fresh Brexit jitters. In the latest developments, the UK Prime Minister said on Wednesday that conditions had been met to invoke Article 16 unless they see rapid progress on the Northern Ireland protocol.

Even from a technical perspective, the GBP/USD pair has broken through support marked by the lower boundary of an upward sloping channel extending from September swing lows. The technical set-up supports prospects for further losses, suggesting that any further recovery might still be seen as a selling opportunity.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3747
Today Daily Change -0.0017
Today Daily Change % -0.12
Today daily open 1.3764
 
Trends
Daily SMA20 1.366
Daily SMA50 1.3711
Daily SMA100 1.3792
Daily SMA200 1.3851
 
Levels
Previous Daily High 1.3829
Previous Daily Low 1.3757
Previous Weekly High 1.3834
Previous Weekly Low 1.3709
Previous Monthly High 1.3913
Previous Monthly Low 1.3412
Daily Fibonacci 38.2% 1.3785
Daily Fibonacci 61.8% 1.3802
Daily Pivot Point S1 1.3738
Daily Pivot Point S2 1.3711
Daily Pivot Point S3 1.3666
Daily Pivot Point R1 1.381
Daily Pivot Point R2 1.3856
Daily Pivot Point R3 1.3883

 

 

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

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD defends 1.1300 even as yields refresh 10-week low

EUR/USD remains sidelined near 1.1320 during early Thursday morning in Asia, following a mildly negative daily performance. The currency major’s latest moves disagree with the fall in the US Treasury yields and the market sentiment.

EUR/USD News

GBP/USD extends sideways grind around 1.3300 ahead of Powell's testimony

GBP/USD continues to move sideways around the 1.3300 handle on Wednesday after the data from the US failed to trigger a significant market reaction. The ADP Employment Change arrived at +534K in November, compared to the market expectation of 525,000. FOMC Chairman Powell will testify at 1500 GMT.

GBP/USD News

Gold still depressed despite the better market mood

Gold recovered on Wednesday alongside the market’s mood, currently trading in the $1,780.00 region. The bright metal advanced on easing demand for the American currency, as stocks turned green following Tuesday’s setback. 

Gold News

Bitcoin to blast off to $100,000 following Plan B’s Stock-to-Flow model

Analysts are evaluating the probability of Bitcoin hitting fresh all-time highs before the end of 2021. There is a spike in fear among Bitcoin traders, but open interest in the futures market remains high despite sell-off. 

Read more

Cyber Monday 2021 Discounts!

Glued to your trading screen on Cyber Monday? Upgrade your skills by signing up for FXStreet’s Premium service, offered at a discount of up to 50%. Fellow traders have already taken advantage of Black Friday profits. What about you? 

Subscribe now!

Forex MAJORS

Cryptocurrencies

Signatures