- The pound is back above 1.3600 with weekly highs of 13650 in sight.
- The US dollar loses steam ahead of Friday’s NFP report.
- GBP / USD remains negative while below 1.3914 – Commerzbank.
The pound sterling reversed the previous day’s decline on Thursday, driven by a somewhat softer tone in the USD. GBP is consolidating above 1.3600 after bouncing from lows of 1.3545, shortly to a one-week high of 1.3650.
The pound cuts losses against a weaker USD
The British pound has appreciated around 0.25% on the day, driven by market optimism and market expectations of a rate hike from the Bank of England.
Stagflation fears eased on Thursday, as oil prices fell from seven-year highs and Russian President Vladimir Putin vowed to increase gas supplies to Europe. Market optimism has been reflected in gains in the world’s major stock indices and has rallied the risk-sensitive GBP.
Beyond that, market expectations that the Bank of England would lead the rest of the major central banks in raising interest rates remain another source of support for the British pound.
On the other hand, the USD has lost ground with investors playing a cautious game ahead of the release of US non-farm payroll data A strong employment report is expected to lead the Federal Reserve to announce the end. of the quantitative easing era, which could set the dollar’s short-term direction.
GBP / USD bias remains negative as long as it is below 1.3914 – Commerzbank
From a broader perspective, Karen Jones, head of the FICC technical analysis research team at Commerzbank, sees risk biased to the downside while below 1.3914: “Currently, as long as it is capped by 1.3914, we will maintain a negative bias and we see a reach to the 200-week MA at 1.3161. The recent low is 1.3411 “.
Technical levels
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