• GBP/USD holds lower ground near weekly bottom, recently inactive.
  • EU sees no fundamental change in UK’s Brexit stance, warns of end to opportunity window next month.
  • UK PM removes “Plan B” measures but fails to overcome political angst, BOE may announce another rate hike in February.
  • Market sentiment dwindles amid pre-Fed concerns, UK Retail Sales may bolster hawkish BOE bets.

GBP/USD differs from other risk-sensitive currency pairs to remain inactive around 1.3590-95 during early Friday. In doing so, the cable pair struggles to justify the risk-off mood amid contrasting signals concerning Brexit and the Bank of England’s (BOE) next move ahead of the key UK Retail Sales for December.

Following the first Brexit meeting with the UK’s representative Liz Truss, the European Union (EU) policymakers reiterated their disappointment with ex-neighbor. “The European Union’s Brexit negotiator told lawmakers behind closed doors that a window of opportunity to strike a deal with the U.K. will close late next month, also cautioning that he has yet to see a fundamental change in London’s stance despite a positive shift in tone,” said Bloomberg. Elsewhere, the UK-India trade deal also lingers amid multiple issues ranging from alcohol to dairy.

Alternatively, strong UK inflation renews hopes of another BOE rate hike in February, which in turn keeps GBP/USD buyers hopeful. The Bank of England will press ahead with its tightening cycle next month as red-hot inflation runs well ahead of target and the economic threat from the Omicron coronavirus variant should prove milder than previous mutations,” per the latest Reuters poll.

It should be noted that the reduction in the virus-led activity restrictions and recently easing covid cases also help GBP/USD to battle the risk-off mood taking clues from the Fed rate hike expectations. The hawkish Fed bets grew after US Treasury Secretary Janet Yellen said during a CNBC interview, “Inflation rose by more than most economists, including me, expected and of course, it's our responsibility with the Fed to address that. And we will.”

Elsewhere, UK PM Boris Johnson remains pressured to leave the PM post due to a controversial booze party during the covid times. Even so, some among the supporters claim that Johnson’s exit will reverse Brexit, which in turn helps the Tory Leader Boris to stay a bit relaxed.

Against this backdrop, the US 10-year Treasury yields posted a second consecutive daily loss, down six basis points to 1.77% at the latest, whereas the S&P 500 Future dropped 0.60% intraday by the press time.

Looking forward, UK Retail Sales for December, expected -0.6% MoM versus +1.4% prior, will be crucial for the GBP/USD prices as BOE bulls are flexing muscles after upbeat UK jobs and inflation figures. “We expect a sharp decline in December retail sales of 1.5% m/m (market forecast: -0.6%) with card spending data suggesting it might be even worse,” said TD Securities in this regard.

Technical analysis

Unless providing a daily closing below the 100-DMA level of 1.3540, GBP/USD sellers remain cautious.

Additional important levels

Today last price 1.3596
Today Daily Change 0.0007
Today Daily Change % 0.05%
Today daily open 1.3589
Daily SMA20 1.3561
Daily SMA50 1.3416
Daily SMA100 1.3546
Daily SMA200 1.3734
Previous Daily High 1.3662
Previous Daily Low 1.3587
Previous Weekly High 1.3749
Previous Weekly Low 1.3532
Previous Monthly High 1.355
Previous Monthly Low 1.3161
Daily Fibonacci 38.2% 1.3616
Daily Fibonacci 61.8% 1.3633
Daily Pivot Point S1 1.3563
Daily Pivot Point S2 1.3538
Daily Pivot Point S3 1.3488
Daily Pivot Point R1 1.3638
Daily Pivot Point R2 1.3687
Daily Pivot Point R3 1.3713



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.


EUR/USD renews fortnight low with eyes on 1.0420, focus on EU/US inflation

EUR/USD renews fortnight low with eyes on 1.0420, focus on EU/US inflation

EUR/USD bears take a breather around mid 1.0400s, pressured near 1.0440 by the press time, as sour sentiment joins anxiety ahead of the Fed’s preferred inflation version. The latest inaction could be linked to the general market dormancy during the initial hours of the Asian session.


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!