- The British pound is set to finish the week on a negative tone, down 0.83%.
- The US Dollar Index pierced the 100 mark for the first time since May 2020.
- GBP/USD Price Forecast: Failure at 1.3200 exacerbated the fall towards 1.3000, which once broken, would send the pair towards 1.2855.
The British pound collapsed at one time under the 1.3000 mark early in the North American session, reaching a one-year and half fresh low at 1.2982. However, GBP bulls recovered the figure amidst a mixed market mood, with European equities gaining while US counterparts fluctuated. At the time of writing, the GBP/USD is trading at 1.3020.
Mixed market sentiment on higher US T-bond yields and a strong greenback weighs on cable
The war between Russia and Ukraine continues, though it appears to be disregarded in Friday’s session. Meanwhile, US Treasury yields are shooting higher, with the US 10-year benchmark note rising six basis points, sitting at 2.728%, underpinning the greenback. The US Dollar Index, a gauge of the buck’s value against a basket of its peers, rallies above 100, up 0.29%, at 100.026, for the first time since May 2020.
Fed speakers crossed the wires on Thursday, led by the uber hawk St. Louis President James Bullard. He said that the Fed policy rate was too low, by 300 basis points. Bullard added that the Fed is not that far behind the curve and expects the Federal Funds Rate (FFR) to end the year at around 3.5%.
In the meantime, Chicago’s Fed President Charles Evans said that the Fed would probably going to get neutral setting by the end of this year or early next.
An absent UK economy docket left GBP/USD traders adrift to US economic data. Meanwhile, the US docket featured Wholesale Inventories for February, which came at 2.5% m/m, higher than the 2.1% estimated.
GBP/USD Price Forecast: Technical outlook
The GBP/USD is further cementing its downward bias, with its failure to cling to 1.3200 opened the door to a re-test of the 1.3000 figure. It’s worth noting that despite the sharp fall of the GBP/USD towards fresh 17-month-lows, the Relative Strength Index (RSI) is at 33.81 within bearish territory, but with enough room to spare, so don’t discount another leg-down.
That said, the GBP/USD first support level on its way down would be 1.3000. A breach of the latter would expose the November 2020 lows near 1.2855, followed by September 2020 lows around 1.2675.
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
Editors’ Picks
EUR/USD consolidates recovery gains above 1.0650
EUR/USD stays in a consolidation phase following Wednesday's rebound and trades in a narrow range above 1.0650. The improving risk mood doesn't allow the US Dollar to gather strength as markets await mid-tier data releases.
GBP/USD clings to moderate gains above 1.2450
GBP/USD is clinging to recovery gains above 1.2450 in European trading on Thursday. The pair stays supported by a sustained US Dollar weakness alongside retreating US Treasury bond yields. Fed policymakers will speak later in the day.
Gold shines amid fears of fresh escalation in Middle East tensions
Gold trades in positive territory near $2,380 on Thursday after posting losses on Wednesday. The precious metal holds gains amid fears over tensions in the Middle East further escalating, with Israel responding to Iran's attack over the weekend.
Ripple faces significant correction as former SEC litigator says lawsuit could make it to Supreme Court
Ripple (XRP) price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.