GBP/USD: Recovery remains capped just ahead of 1.3000


  • Poor UK macro data, increased BOE rate cut calls dent the pound.
  • The US dollar index looks to extend the bounce.
  • Technical set up remains bearish ahead of US CPI data.

GBP/USD consolidates in a tight range just below the 1.30 handle, having failed several attempts to extend the recovery above the last so far this Tuesday.

The upside attempts in the cable remain capped, as the US dollar recovers some ground across the board. The greenback is seen benefiting from the gains in the US Treasury yields fueled by the optimism surrounding an imminent US-China phase one trade deal signing.

Meanwhile, the latest report citing that the USTR removed the currency manipulator label for China also collaborated with the risk-on market mood.  

From the GBP-side of the equation, despite the rebound from three-week lows of 1.2961, the British pound remains exposed to downside risks amid increased calls for a Bank of England (BOE) rate cut as early as this September.

Last week, the BOE Governor Carney said that there is room for 250 bps cut while over the weekend BOE policymaker Vlieghe noted that he would back for a reduction if economic data does not improve. 

Further, a string of downbeat UK fundamentals, including the monthly GDP contraction and a sharp fall in the industrial and manufacturing production data, backs the case for dovish BOE monetary policy stance going forward amid looming Hard Brexit risks.

Moreover, the technical set up has also turned in favor of the bears, as GBP/USD “now looks set to test the head-and-shoulders neckline support at 1.2960 with the 5- and 10-day averages flashing a bearish crossover and the 14-day relative strength index reporting bearish conditions with a below-50 print. A close below that level would confirm a breakdown or a bearish reversal and create room for a slide to 1.2582 (Sept. 20 high)”, FXStreet’s Analyst, Omkar Godbole explains.

The focus now shifts towards the US inflation data due later in the NA session at 1330 GMT, in absence of any relevant data from UK docket this Tuesday. Also, the development surrounding the phase one trade deal will keep the markets busy.

GBP/USD Technical levels to consider

GBP/USD

Overview
Today last price 1.2994
Today Daily Change 0.0000
Today Daily Change % 0.00
Today daily open 1.2995
 
Trends
Daily SMA20 1.3073
Daily SMA50 1.3019
Daily SMA100 1.2762
Daily SMA200 1.2691
 
Levels
Previous Daily High 1.3045
Previous Daily Low 1.2961
Previous Weekly High 1.3213
Previous Weekly Low 1.3013
Previous Monthly High 1.3515
Previous Monthly Low 1.2896
Daily Fibonacci 38.2% 1.2993
Daily Fibonacci 61.8% 1.3013
Daily Pivot Point S1 1.2956
Daily Pivot Point S2 1.2916
Daily Pivot Point S3 1.2872
Daily Pivot Point R1 1.304
Daily Pivot Point R2 1.3085
Daily Pivot Point R3 1.3124

 

 

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

AUD/USD wavers below 0.7300 ahead of Aussie Trade Balance

AUD/USD fades pullback from 0.7264 after marking another failure to cross 0.7340 on D1 closing. DXY rebounds from a 12-week low as US PMIs performed better than EU data in November. Australia’s preliminary Trade Balance for October, RBA’s Debelle can offer immediate direction.

AUD/USD News

Gold in bearish consolidation below $1840, remains vulnerable

Gold (XAU/USD) is nursing losses in Tuesday’s Asian trading, having slumped 2% on Monday to reach the lowest levels in four months at $1831. Vaccine progress, stronger US data hammer gold prices. Focus on vaccine updates and risk sentiment for fresh impetus.

Gold news

USD/JPY regains 104.50, could extend recovery

The USD/JPY pair hit a one-week high of 104.63 and is set to extend gains on persistent dollar’s strength. The positive tone of equities provide additional support to the pair.

USD/JPY News

Bitcoin risks a correction to $12,000

Peter Brandt, author, and publisher of the Factor Report, has exited around 50% of his Bitcoin position. The veteran trader believes Bitcoin might be poised for a correction to $12,000 in the near future.

Read more

Black Friday 2020 Discounts!

Learn to trade with the best! Don't miss the most experienced traders and speakers in FXStreet Premium webinars. Also if you are a Premium member you can get real-time FXS Signals and receive daily market analysis with the best forex insights!

More info

Forex MAJORS

Cryptocurrencies

Signatures