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GBP/USD remains below 1.2700 mark ahead of UK macro data and US PCE Price Index

  • GBP/USD ticks lower on Friday amid a modest USD bounce from a multi-month low.
  • The mixed fundamental backdrop warrants caution before placing directional bets.
  • Traders now look to important UK/US macro releases for some meaningful impetus.

The GBP/USD pair struggles to build on the previous day's solid bounce of around 85 pips from the 1.2610 region, or a one-week low and oscillates in a range during the Asian session on Friday. Spot prices remain below the 1.2700 mark as traders now look to the important macro releases from the UK and the US before positioning for a firm intraday direction.

The UK Office for National Statistics will publish the monthly Retail Sales report during the early European session, along with the final Q3 GDP print. Meanwhile, the US economic docket features the Core Personal Consumption Expenditure (PCE) Price Index, which should influence the Federal Reserve's (Fed) future policy decisions. This, in turn, will drive the US Dollar (USD) demand and provide some meaningful impetus to the GBP/USD pair.

In the meantime, the uncertainty over the timing of when the Fed will begin cutting interest rates in 2024 assist the US in recovering a part of Thursday's downfall to a near five-month low, touched in reaction to a downward revision of the US GDP print. In fact, the third and final reading from the US Bureau of Economic Analysis showed that the world's largest economy expanded by a 4.9% annualized pace as against the second estimate for a 5.2% rise.

Separately, the Labor Department reported that Initial Weekly Jobless Claims rose slightly, by 2K to 205K during the week that ended December 16 and remained at historically low levels. This, however, did little to impress the USD bulls amid dovish Fed expectations and offered support to the GBP/USD pair. Meanwhile, the momentum lacked follow-through amid bets that the Bank of England (BoE) will cut interest rates in the first half of next year.

The speculations were fueled by a plunge in the November UK consumer inflation to its lowest level in over two years. Official data published on Wednesday showed that annual rate of increase in consumer prices decelerated from 4.6% in October to 3.9% last month, marking the lowest reading since September 2021. The markets were quick to price in a 50% chance of a BoE rate cut in March, which undermines the British Pound and caps the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price1.2685
Today Daily Change-0.0003
Today Daily Change %-0.02
Today daily open1.2688
 
Trends
Daily SMA201.2638
Daily SMA501.2422
Daily SMA1001.2449
Daily SMA2001.2514
 
Levels
Previous Daily High1.2696
Previous Daily Low1.2612
Previous Weekly High1.2794
Previous Weekly Low1.2501
Previous Monthly High1.2733
Previous Monthly Low1.2096
Daily Fibonacci 38.2%1.2664
Daily Fibonacci 61.8%1.2644
Daily Pivot Point S11.2635
Daily Pivot Point S21.2582
Daily Pivot Point S31.2551
Daily Pivot Point R11.2718
Daily Pivot Point R21.2749
Daily Pivot Point R31.2802

Author

Haresh Menghani

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

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