• GBP/USD is set to end the week near 1.3600 having bounced nearly 100 pips from intra-day lows.
  • The pair was aided by not as bad as feared UK economic data, but was unreactive to bad UoM figures.
  • Traders will have plenty of UK/US data to watch next week, as well as Fed speak and Fed minutes.

GBP/USD looks set to end Friday trade with gains of about 0.3%, making it amongst the best performing G10 currencies on the session, after not as bad as feared Q4 GDP and December activity data released during early European trade. The pair’s upside seems to have run out of steam at the 1.3600 level as FX flows die down ahead of the weekend, but GBP/USD nonetheless trades nearly 100 pips higher versus earlier session lows just above 1.3500.

Data out next week will play an important role in determining BoE tightening expectations for 2022 (currently, roughly a further 150bps of tightening is expected). The latest labour market data will be released on Tuesday and market participants will get a first look at how the UK labour market performed during the rapid spread of Omicron. January CPI data will then be released on Wednesday ahead of January Retail Sales figures on Friday.

Much weaker than anticipated US University of Michigan Consumer Sentiment survey data, which showed sentiment deteriorating to its worst levels since 2011, did not impact the pair much given that it isn’t seen as likely to deter Fed tightening. GBP/USD is thus on course to end the week around 0.5% higher, marking a second successive week of gains, during which time it has rallied about 1.8% from January lows.

It's unlikely that stronger than expected data next week could bolster BoE tightening expectations to be any more hawkish than they already are. Indeed, many analysts suspect the BoE will deliver far less tightening in 2022 than currently priced into money markets with the economy set to hit multiple speed bumps from Q2 onwards. These include tax hikes, energy price hikes and the prospect of higher borrowing costs and might dissuade the BoE from tightening so aggressively in H2 as inflation levels pull back from the more than 7.0% levels expected in April.

Meanwhile, the US calendar is dominated by Fed speak and the minutes of the last meeting, as well as January Retail Sales and Producer Price Inflation. GBP/USD may remain choppy as investors weigh up the outlook for BoE/Fed policy divergence and how the latest data/central bank releases (and commentary) influence this outlook. Technicians will note support in the 1.3500 area and resistance between 1.3600-1.3650.

GBP/Usd

Overview
Today last price 1.3599
Today Daily Change 0.0045
Today Daily Change % 0.33
Today daily open 1.3554
 
Trends
Daily SMA20 1.3537
Daily SMA50 1.3456
Daily SMA100 1.3506
Daily SMA200 1.3705
 
Levels
Previous Daily High 1.3644
Previous Daily Low 1.3523
Previous Weekly High 1.3628
Previous Weekly Low 1.3387
Previous Monthly High 1.3749
Previous Monthly Low 1.3358
Daily Fibonacci 38.2% 1.3598
Daily Fibonacci 61.8% 1.3569
Daily Pivot Point S1 1.3504
Daily Pivot Point S2 1.3453
Daily Pivot Point S3 1.3383
Daily Pivot Point R1 1.3624
Daily Pivot Point R2 1.3694
Daily Pivot Point R3 1.3745

 

 

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 dribbles around key support below 0.6900, China PMI, US PCE inflation eyed

AUD/USD dribbles around key support below 0.6900, China PMI, US PCE inflation eyed

AUD/USD holds onto the previous day’s bounce off important support while taking rounds to 0.6870 during Thursday’s inactive early Asian session. In addition to defending the corrective pullback, the Aussie pair also portrays the market’s anxiety ahead of important data from a major customer China.

AUD/USD News

USD/JPY advances towards 137.00 amid firmer DXY and mixed Japan data

USD/JPY advances towards 137.00 amid firmer DXY and mixed Japan data

The USD/JPY pair is aiming to recapture its fresh 23-year high around 137.00 as the DXY has strengthened on hawkish commentary from Fed chair Jerome Powell. Japan’s mixed Industrial production data has weakened the yen bulls further.

USD/JPY News

Gold stays on the way to $1,807 support ahead of US PCE inflation

Gold stays on the way to $1,807 support ahead of US PCE inflation

Gold Price struggles to defend the previous day’s bounce off short-term key support during Thursday’s Asian session. In doing so, the yellow metal remains indecisive around $1,818. The yellow metal dropped to the lowest levels in two weeks the previous day.

Gold News

Polygon's MATIC price signals hard times to come, here's why

Polygon's MATIC price signals hard times to come, here's why
Polygon’s MATIC price signals bears have re-entered the market. If the profit-taking continues, a cataclysmic fall could occur to breach the $0.31 low
Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures