- The pound gains momentum before rise in European stock markets and corrections.
- The dollar cuts a six-day streak and falls, without compromising the trend.
- GBP/USD eyeing 1.2600 ahead of US data.
The GBP/USD advances significantly on Friday and cuts weekly losses, driven by the general correction of the dollar and the gains in European stocks. The pair climbed to 1.2582, completing a bounce of more than 170 pips.
GBP/USD bottomed at 1.2410 on Thursday, the lowest level since mid-2020. It then started a rebound that accelerated on Friday, mainly driven by a broad dollar pullback. In addition, the downward correction of the EUR/GBP contributed to give more impetus to the pound.
The dollar index (DXY) is falling after rising for six days in a row and is trading at the 103.00 area. The current rallies of the dollar are seen for the moment as a correction and not a change in trend.
In the US, on Friday, the personal income and spending report will be published, which includes the core price index of personal consumption spending (a measure of inflation closely watched by the Federal Reserve), in addition there will be data on labor costs, the Chicago PMI and consumer confidence figures.
GBP/USD short losing streak
At the moment, the pair is rising snapping a six-day losing streak, in which it went from 1.30 to 1.24. Ahead of the US data it trades near daily highs with a bullish tone.
The next major resistance for the pound is around 1.2600 and then not much else until 1.2690. In the opposite direction, if it lost 1.2545 (20 moving average in four hours), the pound would lose momentum. Relevant support is found at 1.2500, followed by 1.2440, the latest protection to the recent low.
Technical levels
Source: Fx Street
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