GBP/USD struggles to capitalize on overnight bounce from weekly low, remains below 1.2300

GBP/USD struggles to gain any meaningful traction and oscillates in a narrow range on Thursday.
A further decline in the US bond yields keeps the USD bulls on the defensive and lends some support.
The uncertainty over the Fed’s rate hike is holding back traders from placing fresh directional bets.

Haresh Menghani FXStreet

The GBP/USD pair stalls the overnight modest bounce from the 1.2240 area or the weekly low near the 100-hour Simple Moving Average (SMA) and oscillates in a narrow trading band during the Asian session on Thursday. Spot prices currently trade around the 1.2280 region, nearly unchanged for the day, and remain at the mercy of the US Dollar (USD) price dynamics.

The US Treasury bond yields prolong the recent downfall in the wake of growing acceptance that the Federal Reserve (Fed) will not hike interest rates again and keep the USD bulls on the defensive, which, in turn, acts as a tailwind for the GBP/USD pair. Traders, however, seem reluctant to place aggressive bearish bets around the USD and prefer to wait for more clarity on the Fed's future rate-hike path.

Fed Chair Jerome Powell, meanwhile, did not comment on monetary policy in a speech on Wednesday and is also due to speak later this Thursday. Investors will closely scrutinize his comments for cues about the next policy move, which will play a key role in influencing the near-term USD price dynamics and provide some meaningful impetus to the GBP/USD pair in the absence of any relevant data from the UK.

The British Pound (GBP), on the other hand, struggles to attract buyers on the back of mixed signals from the Bank of England (BoE) officials over the possibility of a rate cut next year. BoE's Chief Economist Huw Pill said on Monday that current market pricing for a first-rate cut in August 2024 does not seem totally unreasonable. BoE Governor Andrew Bailey, however, pushed back against speculation about interest rate cuts.

Moving ahead, traders on Thursday will take cues from a scheduled speech by BoE's Pill. Later during the early North American session, the release of the usual Weekly Initial Jobless Claims data will also be looked upon for short-term opportunities, though the focus will remain glued to Powell's speech. Nevertheless, the mixed fundamental backdrop warrants caution before positioning for a firm near-term direction.

Technical levels to watch

GBP/USD

Overview
Today last price	1.2279
Today Daily Change	-0.0009
Today Daily Change %	-0.07
Today daily open	1.2288

Trends
Daily SMA20	1.2196
Daily SMA50	1.2284
Daily SMA100	1.2533
Daily SMA200	1.2435

Levels
Previous Daily High	1.2302
Previous Daily Low	1.2242
Previous Weekly High	1.239
Previous Weekly Low	1.209
Previous Monthly High	1.2337
Previous Monthly Low	1.2037
Daily Fibonacci 38.2%	1.2265
Daily Fibonacci 61.8%	1.2279
Daily Pivot Point S1	1.2253
Daily Pivot Point S2	1.2217
Daily Pivot Point S3	1.2192
Daily Pivot Point R1	1.2313
Daily Pivot Point R2	1.2338
Daily Pivot Point R3	1.2374

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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