- GBPUSD erodes a major part of its weekly gains amid resurgent USD demand.
- A sustained break below the 1.1400 mark will pave the way for further losses.
- Attempted recovery could be seen as a selling opportunity and remain capped.
The GBPUSD pair comes under heavy selling pressure on Wednesday and stalls a three-day-old bullish trend to over a one-week high touched the previous day. The intraday downfall picks up pace during the early North American session and drags spot prices to a fresh daily low, with bears now awaiting a sustained weakness below the 1.1400 mark.
A fresh leg up in the US Treasury bond yields, along with a generally weaker tone around the equity markets, assists the US Dollar to stage a goodish recovery from a multi-week low. The British pound, on the other hand, is weighed down by the Bank of England's gloomy outlook for the UK economy. The combination of the aforementioned factors attracts fresh sellers around the GBPUSD pair and supports prospects for additional losses.
The overnight failure near the 1.1600 round-figure mark adds credence to the negative outlook. That said, technical indicators on the daily chart are yet to confirm a bearish bias and warrant some caution. This makes it prudent to wait for some follow-through selling before confirming that the post-NFP recovery move from levels just below mid-1.1100s has run out of steam and positioning for a further depreciating move for the GBPUSD pair.
Spot prices might then accelerate the fall to the 1.1355-1.1350 intermediate support before eventually dropping to the 1.1300 round figure. The downward trajectory could further get extended and expose the 1.1200 mark, below which the GBPUSD pair could aim to retest last week's swing low, around mid-1.1100s.
On the flip side, the 1.1445-1.1450 region now seems to act as an immediate strong resistance ahead of the 1.1500 psychological mark. Any further recovery might continue to attract fresh supply near the 1.1575-1.1580 region and remain capped. That said, some follow-through buying beyond the 1.1600 mark will negate the negative bias and lift the GBPUSD pair towards the October monthly swing high, around the 1.1645 region.
GBPUSD 4-hour chart
Key levels to watch
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 drops below 1.0800 ahead of key US jobs data
EUR/USD is dropping below 1.0800 in the European session on Wednesday. The pair is dragged by a renewed uptick in the US Dollar, as markets trade with caution ahead of a busy EU and US economic docket. US ADP is the key event risk.
GBP/USD battles 1.2600, with eyes on US ADP data
GBP/USD is trading close to 1.2600, snapping a two-day losing streak in European trading on Wednesday. The modest US Dollar decline acts as a tailwind for the pair but the Pound Sterling struggles amid a cautious market mood. US jobs data awaited.
Gold finds buyers near $2,020, awaits US ADP jobs data
Gold is finding a floor near $2,020 early Wednesday, snapping a two-day correction from all-time highs of $2,144 set on Monday. XAU/USD price capitalizes on a broad US Dollar retreat, as Greenback buyers take a breather following this week’s upswing and ahead of the top-tier US ADP Employment Change data.
Bitcoin-based meme coin ORDI price action wobbles after 1,100% rally
The Bitcoin-based BRC-20 meme coin, which had people confused as being an actual valuable token, is now slowly creeping up to that status. ORDI price rise over the past couple of days has been astonishing, and with BTC driving the price and crossing $44,000, ORDI is also gaining rapidly. But not for long.
The Dollar is struggling to trend
For the last three trading sessions, the dollar index has been crossing up and down the 200-day moving average every day. All in all, the flirting with this level has been going on for more than three weeks, during which neither bulls nor bears were able to form a stable trend.