GBP/USD Price Analysis: Retreats from 1.2460 despite BoE preparing for a rate hike


  • GBP/USD has retreated after a short-lived pullback to near 1.2460 amid a recovery in the USD Index.
  • Stubborn UK inflation is supporting more interest rate hikes from the BoE.
  • GBP/USD is auctioning in a Symmetrical Triangle chart pattern that indicates a contraction in volatility.

The GBP/USD pair has sensed selling pressure around 1.2450 in the early European session. The strength in the Cable seems waned as the US Dollar Index (DXY) attempted a recovery after a correction below 104.00

Stubborn United Kingdom inflation is supporting more interest rate hikes from the Bank of England (BoE), which will keep the Pound Sterling in a bullish trajectory.

The USD Index is likely to remain volatile as the odds of a neutral interest rate policy by the Federal Reserve (Fed) have started receding, knowing the fact that the labor market is extremely solid and an absence of recession signals.

GBP/USD is auctioning in a Symmetrical Triangle chart pattern that indicates a contraction in volatility, which is followed by wider ticks and heavy volume after an explosion. The upward-sloping trendline of the aforementioned chart pattern is plotted from May 25 low at 1.2308 while the downward-sloping trendline is placed from May 10 high at 1.2680.

The 20-period Exponential Moving Average (EMA) at 1.2437 seems sticky to the asset, indicating a sideways performance.

Also, the Relative Strength Index (RSI) (14) has been confined into the 40.00-60.00 range, which signals that investors are awaiting a fresh trigger for a decisive move.

Should the asset break below May 31 low at 1.2348, US Dollar bulls would drag the asset toward May 25 low at 1.2308. Slippage below the latter would expose the asset to April 03 low at 1.2275.

On the flip side, a confident break above May 16 high at 1.2547 will drive the Cable towards May 10 low at 1.2603 followed by May 10 high at 1.2680.

GBP/USD four-hour chart

GBP/USD

Overview
Today last price 1.2445
Today Daily Change 0.0008
Today Daily Change % 0.06
Today daily open 1.2437
 
Trends
Daily SMA20 1.2434
Daily SMA50 1.246
Daily SMA100 1.2305
Daily SMA200 1.2006
 
Levels
Previous Daily High 1.25
Previous Daily Low 1.2395
Previous Weekly High 1.2545
Previous Weekly Low 1.2327
Previous Monthly High 1.268
Previous Monthly Low 1.2308
Daily Fibonacci 38.2% 1.246
Daily Fibonacci 61.8% 1.2435
Daily Pivot Point S1 1.2388
Daily Pivot Point S2 1.2339
Daily Pivot Point S3 1.2283
Daily Pivot Point R1 1.2493
Daily Pivot Point R2 1.2549
Daily Pivot Point R3 1.2598

 

 

Share: Feed news

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.

Recommended content


Recommended content

Editors’ Picks

EUR/USD extends slide below 1.0700 on stronger USD, EU political angst

EUR/USD extends slide below 1.0700 on stronger USD, EU political angst

EUR/USD stays under bearish pressure and trades at its lowest level since early May below 1.0700. Unabated US Dollar demand amid risk aversion and looming EU political uncertainty exert downside pressure on the pair heading into the weekend.

EUR/USD News

GBP/USD slumps to multi-week lows below 1.2700

GBP/USD slumps to multi-week lows below 1.2700

GBP/USD extends its decline on Friday and trades at its lowest level in nearly a month below 1.2700. In the absence of high-tier data releases, the US Dollar continues to benefit from souring market mood, forcing the pair to stretch lower in the second half of the day.

GBP/USD News

Gold clings to recovery gains at around $2,330

Gold clings to recovery gains at around $2,330

Following Thursday's pullback, Gold holds its ground on Friday and trades in positive territory near $2,330. The benchmark 10-year US Treasury bond yield edges lower toward 4.2%, helping XAU/USD push higher ahead of the weekend.

Gold News

Monero price poised for a downward correction

Monero price poised for a downward correction

Monero price has encountered resistance at a critical level. The technical outlook suggests a potential short-term correction as momentum indicators signal a bearish divergence.

Read more

Week ahead – RBA, SNB and BoE next to decide, CPI and PMI data also on tap

Week ahead – RBA, SNB and BoE next to decide, CPI and PMI data also on tap

It will be another central-bank-heavy week with the RBA, SNB and BoE. Retail sales will be the highlight in the United States. Plenty of other data also on the way, including flash PMIs and UK CPI.

Read more

Forex MAJORS

Cryptocurrencies

Signatures