• GBP/USD resumes downside towards the all-time low after a corrective bounce.
  • BOE refrains from early intervention, UK government rules out scope for canceling mini-budget.
  • Pessimism in the UK contrasts with the hawkish Fedspeak, firmer yields to favor US dollar.
  • Bears can keep reins and dig deeper, US Durable Goods Orders, CB Consumer Confidence eyed.

GBP/USD fades bounce off the all-time low marked on Monday, easing to 1.0670 during the early Asian session on Tuesday, as pessimism surrounding the UK remains intact. Also exerting downside pressure on the Cable pair is the hawkish Fedspeak ahead of the week’s key US data.

Be it the newly formed British government or the Bank of England (BOE), both disappointed the GBP/USD traders the previous day by turning down the hopes of meddling to defend the British Pound (GBP).

When asked whether the government is planning to change the measures set out in the mini-budget, British Prime Minister Lis Truss' spokesman responded by simply saying "no," as reported by Reuters. The diplomat also mentioned that it is essential that BOE independence remains while adding that we don’t comment on interest rates.

On the other hand, the BOE stated that they are monitoring developments in financial markets very closely in light of the significant repricing of the financial assets. The BoE further noted that they welcome the government’s commitment to sustainable economic growth and the role of the Office for Budget Responsibility.

Elsewhere, The UK Times stated that Labour has surged to its largest poll lead over the Conservatives in more than two decades, with voters turning against (UK Chancellor) Kwasi Kwarteng’s tax-cutting budget. A YouGov poll for The Times today puts Labour 17 points clear of the Tories — a level of support not seen since Tony Blair won his landslide victory in 2001.

On the other hand, Chicago Fed National Activity Index weakened to 0.0 in August versus 0.09 market expectations and an upwardly revised prior reading of 0.29. Even so, Boston Fed President Susan Collins said, per Reuters, “Getting inflation down will require slower employment growth, somewhat higher unemployment rate”. Following that, Cleveland Fed President Loretta Mester said on Monday that if there is an error to be made, better that the Fed do too much than to do too little.

Amid these plays, the yields rallied as the traders sought premium to hold riskier assets while the equities dropped, which in turn helped the US dollar to remain firmer.

Moving on, headlines from the UK will be crucial for the short-term direction of the GBP/USD pair. However, significant attention could be given to the US CB Consumer Confidence for September and Durable Goods Orders for August will be crucial to watch for intraday guidance. The bears will likely keep the reins and may dominate further if the scheduled US data offers a positive surprise.

Also read: US Consumer Confidence Preview: Near-term relief or more risk aversion?

Technical analysis

Unless crossing a previous support line from May, around 1.1270-80 by the press time, GBP/USD remains vulnerable to dropping towards the record low.

Additional important levels

Overview
Today last price 1.0682
Today Daily Change -0.0178
Today Daily Change % -1.64%
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

EUR/USD extends rebound to 1.0500 amid US Dollar weakness

EUR/USD extends rebound to 1.0500 amid US Dollar weakness

EUR/USD preserves its recovery momentum and trades near 1.0500 in the European session. Despite the risk-averse market atmosphere, the US Dollar is struggling to find demand ahead of mid-tier data releases, helping the pair hold in positive territory.

EUR/USD News

GBP/USD clings to recovery gains above 1.2150

GBP/USD clings to recovery gains above 1.2150

GBP/USD gained traction and climbed above 1.2150 during the European trading hours. The modest US Dollar weakness provides a boost to the pair as the market focus shifts to third-quarter Unit Labor Costs data from the United States.

GBPUSD News

Gold price struggles to gain traction, holds above $1,770

Gold price struggles to gain traction, holds above $1,770

Gold price is having a difficult time gathering bullish momentum and continuing to fluctuate in a tight range slightly above $1,770. The benchmark 10-year US Treasury bond yield holds steady above 3.5% ahead of US data, not allowing XAU/USD to find direction.

Gold News

JP Morgan joins forces with Ripple partner in the UAE, what this means for XRP price

JP Morgan joins forces with Ripple partner in the UAE, what this means for XRP price

JP Morgan will work alongside Al Fardan Exchange LLC in the United Arab Emirates (UAE) to power faster transaction settlement and transfers in fiat currencies.

Read more

S&P 500 (SPX) stocks slide further as market fears Fed

S&P 500 (SPX) stocks slide further as market fears Fed

Equity markets continued to retreat on Tuesday as investors continued to climb the worry wall ahead of the Fed decision next week. Oil fell, and that dragged oil stocks lower with the XLE and XOP both falling nearly 3%.

Read more

Forex MAJORS

Cryptocurrencies

Signatures