GBP/USD Forecast: British pound looks to capitalize on risk flows
British Prime Minister Boris Johnson's optimistic remarks failed to help the British pound gather strength and the GBP/USD pair lost 50 pips while snapping a four-day winning streak on Wednesday. Amid a lack of high-tier data releases, the pair seems to have gone into a consolidation phase around 1.3600 on Thursday, buoyed by risk flows.
While speaking at the Conservative Party Conference on Wednesday, Johnson said that they will not use immigration as an excuse for the failure to invest and added that they are going to be a "high wage, high skill and low tax economy." Although these remarks had little to no impact on the GBP's performance against its rivals, the modest selling pressure surrounding the USD kept the pair's downside limited. Read more...
GBP/USD analysis: Finds support
On Wednesday, the GBP/USD passed one support level after another. During the day, all of the technical support levels were passed and the last one of them, the 100-hour simple moving average, was pierced. However, this did not result in a decline, as the combination of the 100-hour SMA and the 1.3550 eventually held and caused a recovery.
By the start of Thursday's European trading hours, the GBP/USD pair had reached above the 100 and 200-hour simple moving averages and the weekly simple pivot point from 1.3563 to 1.3580. In addition, the pair pierced the last technical level, the 55-hour SMA, at 1.3600. Read more...
GBP/USD struggles to find acceptance above 1.3600 mark
The GBP/USD pair quickly recovered around 25-30 pips from the early European session lows, albeit struggled to capitalize on the move beyond the 1.3600 round-figure mark.
The risk-on impulse in the markets held traders from placing fresh bullish bets around the safe-haven US dollar and acted as a tailwind for the GBP/USD pair. The British pound was further supported by signs of easing fuel crisis in the United Kingdom, though comments by the Bank of England chief economist, Huw Pill, capped gains. Read more...
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