|

GBP/USD prolongs its agony and breaks below 1.2600 amid weak US ADP data

  • GBP/USD sees three-day decline, dropping below 1.2700, shedding over 1% during the week.
  • US data reveals disappointing ADP Employment Change and widening trade deficit, pressuring GBP/USD.
  • Despite weak indicators, US Dollar Index rises 0.22% to 104.19, while BoE Governor Bailey signals potential UK rate cuts amid financial pressures.

GBP/USD trips down and extended its losses to three consecutive days; after diving below the 1.2700 figure, the Pound Sterling (GBP) had shed more than 1% of its value, during the week. At the time of writing, the major is trading at 1.2555, down 0.28% after hitting a daily high of 1.2613.

Pound Sterling faces headwinds amid higher interest rates set by the BoE

Investors' sentiment remains depressed as portrayed by Wall Street. The November ADP Employment Change report revealed private hiring increased by 103K, falling short of the forecasted 130K and the previous month's 106K. later, the US Commerce Department, showed October's US trade deficit widened more than anticipated, reaching $-64.3 billion, exceeding the forecast of $-64.2 billion and trailing September's $-61.2 billion.

Despite this weak data, the US Dollar Index (DXY), tracking the dollar against six other currencies, is up 0.22% at 104.19, while US Treasury bond yields fall.

Across the Atlantic, the Bank of England (BoE) Governor Andrew Bailey stressed that UK banks are well positioned to support borrowers, after the BoE released its Financial Stability Report (FSR). Bailey acknowledged that businesses are pressured by higher rates, while households finances remain stretched. Even though BoE’s members had remained hawkish, expectation for rate cuts had begun to gain some steam, with market participants expecting three 25 bps rate cuts by the end of 2024.

GBP/USD Price Analysis: Technical outlook

The daily chart portrays the pair's failure to decisively break the 1.2700 resistance level, exacerbating the GBP/USD’s fall toward current exchange rates. Therefore, sellers are in charge, and if they break support below 1.2550, that could pave the way toward the 12500 mark. Further downside is expected at the 200-day moving          average (DMA) At 1.2478.

GBP/USD

Overview
Today last price1.2556
Today Daily Change-0.0038
Today Daily Change %-0.30
Today daily open1.2594
 
Trends
Daily SMA201.2502
Daily SMA501.2315
Daily SMA1001.2473
Daily SMA2001.2477
 
Levels
Previous Daily High1.2652
Previous Daily Low1.2578
Previous Weekly High1.2733
Previous Weekly Low1.2591
Previous Monthly High1.2733
Previous Monthly Low1.2096
Daily Fibonacci 38.2%1.2606
Daily Fibonacci 61.8%1.2624
Daily Pivot Point S11.2563
Daily Pivot Point S21.2533
Daily Pivot Point S31.2489
Daily Pivot Point R11.2638
Daily Pivot Point R21.2683
Daily Pivot Point R31.2713

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

More from Christian Borjon Valencia
Share:

Editor's Picks

AUD/USD hangs near three-week low, below 0.6950 as traders await US NFP report

AUD/USD hits a three-week low during the Asian session on Friday as the RBA’s dovish shift and a rout in equity markets weigh on the risk-sensitive Aussie. However, the recent slump in US bond yields to a two-month low keeps US Dollar bulls on the back foot and limits losses for the currency pair as traders look to the US NFP report for a fresh impetus.

USD/JPY bounces off three-week low; keeps the red near 157.65 as focus remains on US NFP

USD/JPY bounces off the weekly low set during the Asian session, as bears turn cautious ahead of the US NFP report due later this Friday. The upside seems limited as the recent slump in US bond yields and hopes of Iran war de-escalation undermine the US Dollar. Moreover, a hawkish BoJ and intervention risks support the Japanese Yen, capping the pair.

Gold loses the grip; $4,000 comes next on the downside

Gold sets aside two daily advances in a row on Friday, opening the door to a potential test of the key $4,000 mark per troy ounce. The precious metal’s retracement follows a decent improvement in the sentiment surrounding the US Dollar, solid NFP data and higher US Treasury yields across the board.

Democrats win House and Senate in US midterms: Why isn’t all bad news for crypto

The biggest story this week was Tuesday’s US midterm elections, which saw Democrats win control of both the House and the Senate in a clear blue wave. This political shift in the US has triggered sharp price swings across the cryptocurrency market.

Week ahead – Inflation and geopolitics in focus as US political landscape shifts

Post-midterm election euphoria fizzles out as risk aversion prevails. US CPI, PPI and Fedspeak on the radar as Fed hike bets remain supported. Oil retreat pauses on mixed hopes about the ongoing conflicts.

US Dollar breaks below 101.50 as Democrats sweep Congress
The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.