GBP/USD spikes to 1.3900 neighbourhood amid notable USD weakness


  • GBP/USD added to its intraday gains and refreshed daily tops amid a broad-based USD selling.
  • Dovish comments by Fed Chair Jerome Powell, sliding US bond yields undermined the buck.
  • Bulls might still wait for a sustained move beyond the 1.3900 mark before placing fresh bets.

The intraday USD selling picked up pace during the early North American session and pushed the GBP/USD pair to fresh daily tops, closer to the 1.3900 mark in the last hour.

The pair caught some aggressive bids near the 1.3800 level on Wednesday and has now recovered its weekly losses recorded over the past two trading sessions. The British pound found some support following the release of hotter-than-expected UK consumer inflation figures. This, along with the emergence of some heavy selling around the US dollar, contributed to the GBP/USD pair's strong intraday positive move.

The already weaker USD lost some additional ground following the release of Fed Chair Jerome Powell's prepared remarks for delivery to the House Financial Services panel. Powell said that inflation is likely to remain elevated in the coming months but will fade away. This, in turn, forced investors to scale back their expectations for an earlier than anticipated monetary policy tightening by the Fed.

The markets now seem convinced that the Fed would wait for a longer period before tapering its asset purchases or raising interest rates. This was reinforced by a sharp intraday fall in the US Treasury bond yields. Apart from this, a turnaround in the risk sentiment exerted some additional downward pressure on the safe-haven greenback, which failed to benefit from a sharper than expected rise in the US Producer Price Index.

Data published by the US Bureau of Labor Statistics showed the US PPI for final demand rose to 7.3% on a yearly basis in June from 6.6% in May. Further details of the publication revealed that the annual Core PPI advanced to 5.6% from 4.8% in May, surpassing analysts' estimate of 5.1%.

It will now be interesting to see if bulls are able to capitalize on the momentum or the GBP/USD pair continues with its struggle to find acceptance above the 1.3900 mark. The key focus will remain on Fed Chair Jerome Powell's semi-annual congressional testimony, which will continue to influence the USD price dynamics and provide some impetus to the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3883
Today Daily Change 0.0071
Today Daily Change % 0.51
Today daily open 1.3812
 
Trends
Daily SMA20 1.3867
Daily SMA50 1.4018
Daily SMA100 1.3941
Daily SMA200 1.3683
 
Levels
Previous Daily High 1.3905
Previous Daily Low 1.38
Previous Weekly High 1.3908
Previous Weekly Low 1.3742
Previous Monthly High 1.4249
Previous Monthly Low 1.3787
Daily Fibonacci 38.2% 1.384
Daily Fibonacci 61.8% 1.3865
Daily Pivot Point S1 1.3773
Daily Pivot Point S2 1.3734
Daily Pivot Point S3 1.3668
Daily Pivot Point R1 1.3878
Daily Pivot Point R2 1.3944
Daily Pivot Point R3 1.3983

 

 

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

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD rebounds to 1.1350 on modest dollar weakness

EUR/USD regained its traction after declining toward 1.1320 during the European session and rose to 1.1350 area. The dollar's is facing modest selling pressure amid falling US Treasury bond yields and allowing the pair to continue to edge higher ahead of the weekend.

EUR/USD News

GBP/USD struggles to pull away from 10-day low set near 1.3550

GBP/USD fell toward 1.3550 on Friday and touched its weakest level in 10 days. Although the US Dollar Index stays in the negative territory in the early American session, the risk-averse market environment doesn't allow the pair to stage a convincing recovery.

GBP/USD News

Gold reclaims $1,840 amid falling US T-bond yields

Gold reversed its direction after testing $1,830 earlier in the day and turned positive on the day above $1,840. The benchmark 10-year US Treasury bond yield is losing more than 3% at 1.75%, fueling XAU/USD's rebound.

Gold News

BTC may capitulate to $30,000

Bitcoin price has dropped considerably over the last three weeks. The recent downswing has made things worse for BTC and hints that a steep correction could be on its way.

Read more

Will the Netflix stock price rebound?

Netflix stock edged down after better than expected Q4 results. Will the Netflix stock price rebound? Expectations of rising subscription and higher prices are bullish for Netflix stock price.

Read more

Forex MAJORS

Cryptocurrencies

Signatures