GBP/USD rebounds from near 2-week lows, back closer to 1.3200 handle

Haresh Menghani FXStreet

• Cunliffe's comments triggered the initial leg of recovery.
• Softer US data-led USD retracement provides an additional boost.
• US-UK trade deal hopes supportive of the goodish rebound.

The GBP/USD pair rallied around 75-pips from an intraday low level of 1.3103 and has now recovered a major part of its early decline to near two-week lows.

The pair managed to find decent support near monthly lows, set on July 2 and was supported by comments from BoE Cunliffe, saying that softer Q1 activity was driven by poor weather and the growth path remains broadly intact.

The up-move was further supported by a modest US Dollar retracement from tops following the release of import price data and weaker than expected UoM consumer sentiment index, which fell to 97.1 in July as against previous month's reading of 98.2.

Meanwhile, positive headlines coming out of the UK PM Theresa May and the US President Donald Trump's joint press conference, pointing to a possible US-UK trade deal provided a minor boost to the British Pound and further collaborated to the pair's goodish recovery.

It would now be interesting to see if the pair is able to build on the momentum or struggles to make it through the 1.3200 handle. Nevertheless, the pair remains on track to end the week in the red and possibly the lowest weekly close since Nov. 2017.

Technical levels to watch

The 1.3200 handle might continue to act as an immediate hurdle, above which the recovery move could further get extended back towards 1.3270-80 supply zone en-route the 1.3300 round figure mark.

On the flip side, the 1.3140 level now seems to protect the immediate downside, which if broken might turn the pair vulnerable to test sub-1.3100 level before eventually dropping to YTD low level of 1.3050.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.