GBP/USD steadily climbs back closer to 1.2000 mark amid broad-based USD weakness


  • GBP/USD once again finds support near the 200-day SMA and regains positive traction on Friday.
  • Retreating US bond yields prompts some selling around the USD, which is seen as lending support.
  • Rising bets for additional rate hikes by the BoE and the Fed warrant caution for aggressive traders.

The GBP/USD pair attracts fresh buyers in the vicinity of a technically significant 200-day Simple Moving Average (SMA) and reverses a part of the overnight losses back closer to the weekly low. The pair sticks to its intraday gains and is currently placed near the top end of the daily range, just a few pips below the 1.2000 psychological mark.

A modest pullback in the US Treasury bond yields prompts some selling around the US Dollar, which, in turn, is seen as a key factor pushing the GBP/USD pair higher. The British Pound draws additional support from rising bets for additional rate hikes by the Bank of England (BoE). It is worth recalling that the BoE Governor Andrew Bailey said on Wednesday that some further increase in bank rates may turn out to be appropriate, though added that nothing is decided. This was followed by hawkish remarks by the BoE Chief Economist Huw Pill on Thursday, noting that Britain's economy is showing slightly more momentum than expected and pay growth is proving a bit faster than the central bank forecast last month.

The downside for the USD, however, seems cushioned, at least for the time being, amid firming expectations for further policy tightening by the Federal Reserve. The US CPI, PPI and the PCE Price Index released recently indicated that inflation isn't coming down quite as fast as hoped. Moreover, the incoming upbeat US macro data, including the Initial Jobless Claims on Thursday, pointed to an economy that remains resilient, which should allow the US central bank to stick to its hawkish stance for longer. Adding to this, a slew of FOMC members backed the case for higher rate hikes to tame stubbornly high inflation. This should act as a tailwind for the US bond yields and continue to lend some support to the Greenback.

It is worth recalling that the yield on the benchmark 10-year US government bond rose to its highest level since last November and the rate-sensitive two-year Treasury note had shot to levels last seen in July 2007 on Thursday. This, along with the GBP/USD pair's two-way price action witnessed over the past four weeks or so, warrants some caution for aggressive traders and positioning for a firm near-term direction. Next on tap is the release of the final UK Services PMI, which will be followed by the US ISM Non-Manufacturing PMI later during the early North American session. The data might provide some impetus to the major and allow traders to grab short-term opportunities on the last day of the week.

Technical levels to watch

GBP/USD

Overview
Today last price 1.1986
Today Daily Change 0.0035
Today Daily Change % 0.29
Today daily open 1.1951
 
Trends
Daily SMA20 1.2047
Daily SMA50 1.2141
Daily SMA100 1.1977
Daily SMA200 1.1919
 
Levels
Previous Daily High 1.2036
Previous Daily Low 1.1925
Previous Weekly High 1.2148
Previous Weekly Low 1.1928
Previous Monthly High 1.2402
Previous Monthly Low 1.1915
Daily Fibonacci 38.2% 1.1967
Daily Fibonacci 61.8% 1.1994
Daily Pivot Point S1 1.1905
Daily Pivot Point S2 1.1859
Daily Pivot Point S3 1.1794
Daily Pivot Point R1 1.2016
Daily Pivot Point R2 1.2082
Daily Pivot Point R3 1.2128

 

 

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 extends recovery toward 1.0750

EUR/USD extends recovery toward 1.0750

EUR/USD preserves its recovery momentum and edges higher toward 1.0750 on Monday, after closing the previous week in negative territory. The improving risk mood makes it difficult for the US Dollar to find demand and helps the pair stretch higher.

EUR/USD News

GBP/USD rises toward 1.2700 on renewed USD weakness

GBP/USD rises toward 1.2700 on renewed USD weakness

GBP/USD trades in the green near 1.2700 in the second half of the day on Monday. After outperforming its rivals on upbeat PMI data on Friday, the US Dollar stays on the back foot amid a positive shift in risk sentiment, allowing the pair to extend its rebound.

GBP/USD News

Gold clings to modest daily gains near $2,330

Gold clings to modest daily gains near $2,330

After a quiet European session, Gold edges higher toward $2,330. Following Friday's sharp decline, XAU/USD manages to hold its ground as the benchmark 10-year US Treasury bond yield struggles to push higher, while the USD weakens on upbeat market mood.

Gold News

Week ahead: Bitcoin dips under $63,000, meme coins fade with steep correction in top five

Week ahead: Bitcoin dips under $63,000, meme coins fade with steep correction in top five

Bitcoin dipped under $63,000 on Monday, lowering crypto market capitalization by over 3%, per CoinGecko data. BTC is in a state of decline, and news of VanEck’s Spot Bitcoin ETF launch in Australia failed to improve traders' sentiment. 

Read more

Three things to watch this week: Key elections and inflation data

Three things to watch this week: Key elections and inflation data

 This week we have some key elections in France and the UK, and we get inflation data from the US and major European economies that will determine the course of interest rates in the coming months.

Read more

Forex MAJORS

Cryptocurrencies

Signatures