- GBP/USD picks up bids to reverse the pullback from six-month high.
- UK’s BRC Like-For-Like Retail Sales improved in November.
- US Dollar retreats amid softer inflation expectations but strong data keeps Greenback bears off the table.
- Pre-Fed blackout, light calendar to restrict short-term moves and may allow traders to pare recent losses.
GBP/USD renews its intraday high around 1.2210 as it reverses the week-start pullback from a six-month top during Tuesday’s Asian session. The Cable pair’s latest run-up could be linked to the US Dollar’s retreat amid dovish expectations from the US Federal Reserve and the UK’s firmer data.
That said, the British Retail Consortium (BRC) Like-For-Like Retail Sales jumped 4.1% YoY in November versus 1.2% prior. Even so, Reuters said, “British consumer spending ticked up last month at a rate that greatly lagged behind inflation, according to surveys on Tuesday that underscored the pressure on household budgets ahead of the Christmas holidays.”
Elsewhere, US inflation expectations per the 10-year and 5-year breakeven inflation rates per the St. Louis Federal Reserve (FRED) data challenge the recent hawkish bias over the US Federal Reserve (Fed) by taking a U-turn from a one-month high. The latest prints of the 5-year and 10-year inflation expectations portray a pullback from the one-month high to 2.46% and 2.39%, respectively.
It should be noted that the downbeat UK data and firmer US statistics allowed the GBP/USD pair to reverse from the multi-day top on Monday.
Final readings of the UK’s November month S&P Global/CIPS Composite PMI eased to 48.2 versus 48.3 initial forecasts, whereas the S&P Global/CIPS Services PMI confirmed the 48.8 flash estimates.
On the other hand, US ISM Services PMI rose to 56.5 in November versus 53.1 market forecast and 54.4 previous readings whereas the Factory Orders also registered 1.0% growth compared to 0.7% expected and 0.3% prior. Further, S&P Global Composite PMI improved to 46.4 versus 46.3 initial estimations while the Services counterpart rose to 46.2 compared to 46.1 flash forecasts.
Besides the UK data, hopes of China’s fast recovery from Covid also seemed to have favored the GBP/USD rebound. Reuters reported on Monday that China is on course to downgrade its management of COVID-19 from a top-level Category A infectious disease to a less strict Category B disease as early as January. The news came after Chinese President XI Jinping termed the previous jump in the virus cases as Omicron and mostly of mild nature.
Against this backdrop, S&P 500 Futures print mild gains despite Wall Street’s downbeat close whereas the US 10-year Treasury bond yields retreat to 3.57% after rising eight basis points (bps) the previous day.
To sum up, mixed sentiment in the market and an absence of major data, and optimism surrounding China and the pre-Fed blackout, allowed GBP/USD to stay firmer. However, the bulls may have limited upside room as the Bank of England (BOE) hawks seem less convincing, and the chatters surrounding the UK’s economic transition have turned grim as of late.
Unless providing a daily closing below the 200-DMA support near 1.2135, the GBP/USD buyers remain hopeful.
Additional important levels
|Today last price||1.2202|
|Today Daily Change||0.0023|
|Today Daily Change %||0.19%|
|Today daily open||1.2179|
|Previous Daily High||1.2345|
|Previous Daily Low||1.2162|
|Previous Weekly High||1.2311|
|Previous Weekly Low||1.19|
|Previous Monthly High||1.2154|
|Previous Monthly Low||1.1147|
|Daily Fibonacci 38.2%||1.2232|
|Daily Fibonacci 61.8%||1.2275|
|Daily Pivot Point S1||1.2112|
|Daily Pivot Point S2||1.2045|
|Daily Pivot Point S3||1.1929|
|Daily Pivot Point R1||1.2295|
|Daily Pivot Point R2||1.2412|
|Daily Pivot Point R3||1.2478|
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.
Follow us on Telegram
Stay updated of all the news
EUR/USD clings to gains near 1.0900 as USD remains weak
EUR/USD has regained its traction and climbed to the 1.0900 area in the American session following a technical correction early in the day. The persistent US Dollar weakness amid improving risk mood allows the pair to keep its footing in the second half of the day.
GBP/USD stabilizes above 1.2300 on BOE day
Following a pullback with the initial reaction to the Bank of England's policy announcements, GBP/USD has regained its traction and climbed above 1.2300. The pair remains on track to post gains for the second straight day as the US Dollar struggles to find demand.
Gold: XAU/USD approaches $2,000 amid broad US Dollar weaknes Premium
Spot gold retains its positive momentum and trades around $1,995 a troy ounce on Thursday. XAU/USD is extending its post-Fed advance, as the American central bank came out with a dovish message on Wednesday, triggering a dollar’s sell-off.
Breaking: Terraform Labs founder Do Kwon arrested in Montenegro: Interior minister
Terraform Labs' founder Do Kwon is arrested, according to Minister of Interior of Montenegro Filip Adzic. This is a developing story and will updated
Ford (F) Stock News and Forecast: $3 billion EV loss leads shares to advance
Ford (F) stock is demonstrating on Thursday exactly why automotive C suites are pivoting to electric vehicles. It is not because of the environment or due to easy profits. It is because the market likes it.