- Pound ends turbulent week with a 700-pips slide versus US dollar.
- DXY trims losses on Friday, ends near 103.00, best week in years.
The GBP/USD pair on Friday trimmed gains significantly and it was about to end the week with a 700 pip slide. After reaching levels on top of 1.1900, the pound weakened and retreat back under 1.1600.
The greenback remains strong in the market. The DXY spend most of the day in negative territory but during the American session recovered ground and rose back to the recent high, close to 103.00. It is up 4.10% from a week ago, the best performance in years. Not even lower US yields, or when the equity market posted gains, curbed US dollar’s strength. The pound, on the contrary, remains under pressure, affected by risk aversion.
Volatility across pound’s crosses is set to remain at extreme levels next week, even if market conditions improve. The coronavirus pandemic and the response will continue to dominate the scene. Regarding data, PMI’s in the US and Europe are due. “After the ZEW and IFO surveys showed sharp declines last week, we look for the PMI to echo this in Germany. For the UK, shutdowns lag the rest of the continent and may not bias the PMI down by as much”, wrote TDS analysts.
GBP/USD Levels to watch
“The round level of 1.16 may provide some support. It is followed by 1.1440, the initial trough, followed by 1.1409, the most recent 35-year low. The next significant levels to watch are 1.12 and 1.10”, said Yohay Elam from FXStreet.
According to Elam, resistance awaits at the post-crash high of 1.1878, followed by the September 2019 low of 1.1957, the round 1.20 level, and then 1.2120 that capped cable before the collapse.
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
Editors’ Picks
EUR/USD stays below 1.0800 after upbeat US data
EUR/USD stays under bearish pressure and trades slightly below 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold clings to strong daily gains above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.