GBP/USD: Upside pressure mitigated below 1.2350 – UOB

Pablo Piovano FXStreet

In the opinion of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, the upward bias could lose traction if GBP/USD breaks below 1.2350.

Key Quotes

24-hour view: We indicated yesterday that GBP “appears to have entered a consolidation phase”, and we held the view that it “is likely to trade in a range of 1.2380/1.2480”. GBP then dipped to 1.2377, rebounded to 1.2455, and then eased off to close largely unchanged at 1.2415 (+0.01%). The price movements still appear to be consolidative, and we continue to expect GBP to trade in a range, probably between 1.2375 and 1.2460.

Next 1-3 weeks: Our latest narrative was from two days ago (15 Nov, spot at 1.2490), wherein GBP “is likely to continue to advance, but it has to break clearly above 1.2580 before a further sustained rise is likely.” Since then, GBP has not been able to make any headways on the upside as it eased off over the past couple of days. While upward momentum has waned somewhat, only a breach of 1.2350 (no change in ‘strong support’ level from yesterday) would indicate that GBP is not advancing further.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD hits nine-week lows below 0.7000 on RBA Bullock's remarks

AUD/USD reverses a brief uptick and turns lower to hit nine-week lows below 0.7000 in the European morning on Tuesday, as traders digest cautious remarks from Reserve Bank of Australia (RBA) Governor Michele Bullock during the press conference. Earlier on, the RBA raised the cash rate to 4.60%, as widely expected, leaving the door open to further rate hikes if needed.

USD/JPY consolidates near 157.50 as a bullish USD counters intervention risks

USD/JPY struggles to capitalize on the overnight bounce from a one-week low, consolidating around 157.50 in the Asian session on Tuesday. Trump's concerns about the Japanese Yen's weakness fueled speculation about another US-Japan joint intervention. This, along with the hawkish BoJ, underpins the JPY and caps the currency pair. Meanwhile, rising Fed rate-hike bets and oil-driven inflation fears continue to push US bond yields to multi-year highs, keeping the US Dollar pinned near a two-month high and supporting the pair.

Gold regains some traction; focus remains on $4,100

Gold manages to gather some composure and bounces off recent lows near the key $4,100 mark per troy ounce on Tuesday. The move higher in the precious metal comes despite the firmer US Dollar and rising US Treasury yields across the board, while escalating geopolitical tensions appear to limit the downside potential.