GBP/USD sits near its highest level since September, just below mid-1.2500s ahead of FOMC minutes


  • GBP/USD scales higher for the third successive day and advances to over a two-month top.
  • Dovish Fed expectations, sliding US bond yields and a positive risk tone undermine the USD.
  • Technical buying above the 100-day SMA fuels the momentum ahead of the FOMC minutes.

The GBP/USD pair continues to gain positive traction for the third successive day and climbs to over a two-month peak during the first half of trading action on Tuesday. Spot prices maintain the bid tone around the 1.2530-1.2535 region through the early European session and seem poised to build on the ascending trend in the wake of the underlying bearish sentiment surrounding the US Dollar (USD).

In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, dives to its lowest level since August 31 amid dovish Federal Reserve (Fed) expectations. Market participants now seem convinced that the US central bank is done with its policy-tightening campaign and have been pricing in the possibility of a series of rate cuts in 2024. This leads to a further decline in the US Treasury bond yields, which, along with a positive tone around the equity markets, is seen undermining the safe-haven buck and acting as a tailwind for the GBP/USD pair.

The British Pound (GBP), on the other hand, draws support from the fact that the Bank of England (BoE) Governor Andrew Bailey downplayed speculations about a possible rate cut. Speaking at an event on Monday, Bailey said that it was far too early to be thinking about rate cuts and borrowing costs might have to go up again if there were signs that inflation was proving more persistent than expected. This is seen as another factor lending support to the GBP/USD pair, though bulls might refrain from placing aggressive bets ahead of the crucial FOMC meeting minutes.

Investors will get a fresh insight into Fed officials' view on whether the US central bank should raise interest rates again. This will play a key role in influencing the near-term USD price dynamics and provide a fresh directional impetus to the GBP/USD pair. Nevertheless, spot prices now seem to have found acceptance above the 100-day Simple Moving Average (SMA), which might have already set the stage for a further near-term appreciating move.

Technical levels to watch

GBP/USD

Overview
Today last price 1.2524
Today Daily Change 0.0017
Today Daily Change % 0.14
Today daily open 1.2507
 
Trends
Daily SMA20 1.2276
Daily SMA50 1.2256
Daily SMA100 1.2507
Daily SMA200 1.2446
 
Levels
Previous Daily High 1.2518
Previous Daily Low 1.2446
Previous Weekly High 1.2506
Previous Weekly Low 1.2213
Previous Monthly High 1.2337
Previous Monthly Low 1.2037
Daily Fibonacci 38.2% 1.249
Daily Fibonacci 61.8% 1.2473
Daily Pivot Point S1 1.2463
Daily Pivot Point S2 1.2419
Daily Pivot Point S3 1.2391
Daily Pivot Point R1 1.2534
Daily Pivot Point R2 1.2562
Daily Pivot Point R3 1.2606

 

 

Share: Feed news

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.

Recommended content


Recommended content

Editors’ Picks

EUR/USD retreats toward 1.0850 on modest USD recovery

EUR/USD retreats toward 1.0850 on modest USD recovery

EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.

EUR/USD News

GBP/USD holds above 1.2650 following earlier decline

GBP/USD holds above 1.2650 following earlier decline

GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.

GBP/USD News

Gold climbs to multi-week highs above $2,400

Gold climbs to multi-week highs above $2,400

Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.

Gold News

Chainlink social dominance hits six-month peak as LINK extends gains

Chainlink social dominance hits six-month peak as LINK extends gains

Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday. 

Read more

Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates

Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates

After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.

Read more

Forex MAJORS

Cryptocurrencies

Signatures