- GBP/USD is trading in a tight range on the last day of the week.
- The less hawkish FOMC minutes continue to weigh on the USD and offer support for the pair.
- Low volume conditions due to the US holiday prevent bulls from opening new positions.
The pair GBP/USD It oscillates in a tight range during the early hours of the European session on Friday and consolidates this week’s strong advance to reach the highest level since August 12. The pair is currently around the round level of 1.2100 and remains close to the technically significant 200-day SMA.
The US dollar struggles to gain significant traction and weakens just above the monthly low, which in turn continues to act as a tailwind for GBP/USD. The dovish assessment of the FOMC meeting minutes released on Wednesday continues to drag down US Treasury yields. This, along with a generally positive tone around the equity markets, is seen as weighing on the safe-haven US dollar.
On the other hand, sterling is supported by the recent sharp decline in UK government bond yields. This represents an easing of financial conditions in the UK, which should allow the Bank of England to continue raising borrowing costs to control inflation. The combination of the aforementioned fundamental factors supports the prospects for a further short-term bullish move for the GBP/USD pair.
Having said that, the bleak outlook for the UK economy could discourage traders from entering aggressive bullish positions amid a less than optimistic outlook for the UK economy. It is worth remembering that the UK Office for Budget Responsibility (OBR) projected UK GDP to fall by 1.4% next year, compared with 1.8% growth forecast in March. This, in turn, could limit the gains of the GBP/USD pair.
However, the pair remains on track to record gains for the third week in a row, absent market-relevant economic releases from either the UK or US on Friday. Market attention now turns to next week’s important US macroeconomic data, with the preliminary 3Q GDP report, the core PCE price index (the Fed’s preferred inflation gauge) and monthly data on NFP employment.
GBP/USD technical levels
|Last price today||1.2093|
|today’s daily change||-0.0027|
|today’s daily change||-0.22|
|today’s daily opening||1,212|
|previous daily high||1.2154|
|previous daily low||1.2048|
|Previous Weekly High||1.2029|
|previous weekly low||1,171|
|Previous Monthly High||1.1646|
|Previous monthly minimum||1.0924|
|Daily Fibonacci of 38.2%.||1.2113|
|Daily Fibonacci of 61.8%||1.2088|
|Daily Pivot Point S1||1,206|
|Daily Pivot Point S2||1.2001|
|Daily Pivot Point S3||1.1954|
|Daily Pivot Point R1||1.2166|
|Daily Pivot Point R2||1.2213|
|Daily Pivot Point R3||1.2272|
Source: Fx Street