GBP/USD trims a part of intraday gains, still well bid above 1.2000 amid weaker USD


Share:
  • GBP/USD regains positive traction on Tuesday amid the emergence of fresh USD selling.
  • Bets for less aggressive Fed rate hikes continue to weigh on the buck amid a positive risk tone.
  • A bleak outlook for the UK economy acts as a headwind for the GBP and caps gains for the pair.

The GBP/USD pair attracts fresh buying on Tuesday and reverses a major part of the previous day's slide to a three-day low. The pair, however, retreats a few pips from the daily peak touched during the first half of the European session and is currently trading just above the 1.2000 psychological mark.

A combination of factors prompts fresh selling around the US Dollar, which, in turn, is seen extending some support to the GBP/USD pair. The global risk sentiment gets a minor lift after Chinese authorities hinted to loosen COVID-19 restrictions, despite a nationwide surge in cases. This is evident from signs of stability in the equity markets and undermines the safe-haven Greenback. Furthermore, expectations that the Fed will slow the pace of its policy tightening exert additional downward pressure on the buck.

In fact, the November Federal Open Committee Market (FOMC) meeting minutes released last week cemented market bets for a relatively smaller 50 bps rate hike in December. This leads to a fresh leg down in the US Treasury bond yields and continues to weigh on the USD. The British Pound, on the other hand, draws support from rising bets for further substantial Bank of England rate hikes. That said, a bleak outlook for the UK economy acts as a headwind for the Sterling and keeps a lid on any meaningful appreciating move for the GBP/USD pair, at least for now.

There isn't any major market-moving macro data due for release from the UK on Tuesday, while the US economic docket features the Conference Board's Consumer Confidence Index. Apart from this, speeches by BoE MPC Member Catherine Mann and Governor Andrew Bailey will be looked upon for some impetus. Traders will also take cues from the broader risk sentiment, which might influence the USD and produce short-term opportunities around the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price 1.2023
Today Daily Change 0.0075
Today Daily Change % 0.63
Today daily open 1.1948
 
Trends
Daily SMA20 1.173
Daily SMA50 1.1428
Daily SMA100 1.1645
Daily SMA200 1.2176
 
Levels
Previous Daily High 1.2118
Previous Daily Low 1.1941
Previous Weekly High 1.2154
Previous Weekly Low 1.1779
Previous Monthly High 1.1646
Previous Monthly Low 1.0924
Daily Fibonacci 38.2% 1.2009
Daily Fibonacci 61.8% 1.205
Daily Pivot Point S1 1.1887
Daily Pivot Point S2 1.1825
Daily Pivot Point S3 1.1709
Daily Pivot Point R1 1.2064
Daily Pivot Point R2 1.218
Daily Pivot Point R3 1.2242

 

 

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.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

EUR/USD struggles near 1.0750, focus on ECB-speak, Powell

EUR/USD struggles near 1.0750, focus on ECB-speak, Powell

EUR/USD is consolidating gains near 1.0750 in the early European morning. The main currency pair is capitalizing on a broad-based US Dollar retreat, in the face of sluggish Treasury bond yields and a mild risk-on market profile. ECB commentary and Powell's speech eyed. 

EUR/USD News

GBP/USD clings to gains around 1.2050 ahead of Powell

GBP/USD clings to gains around 1.2050 ahead of Powell

GBP/USD is trading close to 1.2050, preserving gains ahead of the London Open. The upbeat market mood and renewed Brexit optimism boes well for the Pound Sterling while the US Dollar retreats with Treasury yields ahead of Fed Chair Powell's speech. 

GBP/USD News

Gold encounters barricades around $1,875 as USD Index attempts recovery

Gold encounters barricades around $1,875 as USD Index attempts recovery

Gold price (XAU/USD) is facing pressures in recovery extension above the critical resistance of $1,875.00 in the Asian session. The precious metal has sensed selling interest as the US Dollar Index (DXY) has attempted a recovery after correcting to near 103.10.

Gold News

Will Bitcoin price test $20,000 again?

Will Bitcoin price test $20,000 again?

Bitcoin price shows clear signs of distribution occurring on the four-hour chart, which indicates the possibility of a trend reversal. Moreover, BTC has been consolidating for more than two weeks with no direction in sight.

Read more

Central banks, markets and the economy: Three times wrongfooted

Central banks, markets and the economy: Three times wrongfooted

In the US, financial conditions have eased in recent months and weighed on the effectiveness of the Fed’s policy tightening. Jerome Powell recently gave the impression of not being too concerned, so markets rallied.

Read more

Forex MAJORS

Cryptocurrencies

Signatures