• GBP/USD stages a goodish intraday bounce from an all-time low touched earlier this Monday.
  • Speculations for BoE intervention offer support to sterling and prompt intraday short-covering.
  • A modest USD profit-taking slide from a fresh two-decade high contributes to the momentum.
  • A combination of factors should keep a lid on any meaningful upside for the pair, at least for now.

The GBP/USD pair manages to recover a major part of its early lost ground to an all-time low and moves back to the 1.0700 mark during the first half of the European session. The attempted recovery, however, lacks follow-through buying and runs the risk of fizzling out rather quickly.

Speculations that the Bank of England will have to step in to stabilise the domestic currency helped the British pound to stall its free-fall following the new UK government's mini-budget on Friday. This, in turn, is leadsing to an intraday US dollar profit-taking slide from a fresh two-decade high, which further contributes to the GBP/USD pair's intraday recovery of over 400 pips from the 1.0330 area.

That said, a more hawkish stance adopted by the Fed, along with a further rise in the US Treasury bond yields and the prevalent risk-off mood, should help limit any meaningful USD corrective slide. In fact, the Fed last week delivered another supersized rate hike and signalled that it will likely undertake more aggressive increases at its upcoming meetings to combat stubbornly high inflation.

This, in turn, pushes the yield on the rate-sensitive 2-year US government bond to a 15-year peak and the benchmark 10-year Treasury note to its highest level in 11 years. Meanwhile, the rapidly rising borrowing costs, along with the risk of a further escalation in the Russia-Ukraine conflict, have been fueling concerns about a deeper global economic downturn and weighing on investors' sentiment.

The anti-risk flow is evident from a generally weaker tone around the equity markets, which could lend some support to the safe-haven greenback. Furthermore, the lack of confidence in the government’s ability to manage the ballooning debt might continue to act as a headwind for sterling. This, in turn, should keep a lid on any meaningful upside for the GBP/USD pair, at least for now.

Technical levels to watch

GBP/USD

Overview
Today last price 1.0708
Today Daily Change -0.0152
Today Daily Change % -1.40
Today daily open 1.086
 
Trends
Daily SMA20 1.1475
Daily SMA50 1.1808
Daily SMA100 1.2045
Daily SMA200 1.2654
 
Levels
Previous Daily High 1.1274
Previous Daily Low 1.084
Previous Weekly High 1.1461
Previous Weekly Low 1.084
Previous Monthly High 1.2294
Previous Monthly Low 1.1599
Daily Fibonacci 38.2% 1.1006
Daily Fibonacci 61.8% 1.1108
Daily Pivot Point S1 1.0708
Daily Pivot Point S2 1.0557
Daily Pivot Point S3 1.0274
Daily Pivot Point R1 1.1143
Daily Pivot Point R2 1.1426
Daily Pivot Point R3 1.1577

 

 

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 Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD extends rally above 0.6800 as US Dollar sell-off continues

AUD/USD extends rally above 0.6800 as US Dollar sell-off continues

The AUD/USD pair trades near a weekly peak of 0.6843, maintaining the bullish potential intact amid US data supporting a slower pace of quantitative tightening. Focus now on RBA’s Governor Lowe speech.

AUDUSD News

EUR/USD holds on to gains at around 1.0510

EUR/USD holds on to gains at around 1.0510

EUR/USD holds on to substantial gains above 1.0500 amid the broad US Dollar weakness. Optimism further fueled the rally as China moves away from its zero-Covid policy.

EUR/USD News

Gold bulls conquered $1,800, what’s next?

Gold bulls conquered $1,800, what’s next?

Gold jumped to $1,804.00, its highest since early August. The metal benefited from an extended USD sell-off as US macroeconomic figures fueled Powell’s triggered slump. On Wednesday, the Dollar fell on the back of a dovish message from Fed's Powell.

Gold News

Bitcoin price witnesses 44% increase of deposits to all exchanges in November

Bitcoin price witnesses 44% increase of deposits to all exchanges in November

BTC rallied back into the $17,000 price zone after several failed attempts. Bitcoin price a countertrend move just before November's auction finalized. Still, on-chain metrics suggest the downtrend is not yet over.

Read more

Nonfarm Payrolls Preview: Dollar selling opportunity? Low expectations to trigger temporary bounce Premium

Nonfarm Payrolls Preview: Dollar selling opportunity? Low expectations to trigger temporary bounce

A flashback to 2019 just before 2022 ends? The last Nonfarm Payrolls release is set to show a pre-pandemic level of job gains, around 200,000. Or maybe lower. However, expect another positive surprise – triggering a temporary Dollar bounce. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures