Home Markets GBP/USD falls towards 1.2000 after the aggressive statements of the Fed

GBP/USD falls towards 1.2000 after the aggressive statements of the Fed

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GBP/USD falls towards 1.2000 after the aggressive statements of the Fed
  • GBP/USD sellers are eyeing a break below 1.2000 which would pave the way for 1.1800.
  • Fed’s Daly: 50 or 75 bps hike in September is reasonable; rates will rise and remain until inflation is favored.
  • US jobless claims fall; housing data continues to weaken.

The GBP/USD remains on the defensive after falling below the 20-50 DMA on Wednesday, extending its losses for the second day in a row. Factors such as San Francisco Fed’s Mary Daly opposing a “dovish” Fed tilt, perceived by market participants as the FOMC minutes were released on Wednesday, added to sentiment. The USD remains higher with the US Dollar Index rising 0.48%, above the 107.00 threshold.

GBP/USD is trading at 1.2005, below its opening price, after reaching a daily high of 1.2079 earlier in the European session.

GBP/USD falls on sentiment change, and Fed spokespeople delay rate cut

Mary Daly, president of the San Francisco Fed, commented that it is too early to declare victory over inflation and said that 50 or 75 basis points is reasonable for the September meeting, via CNN. She added that core inflation continues to rise and the market lacks understanding, but consumers understand that rates will not go down right after they have gone up.

Meanwhile, US initial jobless claims for the week ending August 13 fell to 250,000, less than the 265,000 estimated by analysts, while the housing market continued to cool off on further evidence of increases. of Federal Reserve rates. Existing home sales for July fell 5.9%, to a pace of 4.8 million units in July, the lowest level since May 2020, when sales hit their lowest point during the Covid-19 closures.

Separately, on Wednesday, the UK reported inflation for July, which exceeded the 10% threshold for the first time in 40 years. The Office for National Statistics revealed that the Consumer Price Index (CPI) rose 10.1% from a year earlier, after registering 9.4% in June. Following the report, money market futures forecast a nearly 200 basis point rate hike, in the Bank of England rate, to 3.75%, by May 2023.

GBP/USD remains neutrally biased to the downside, but central bank monetary policy convergence could lead to range trading. With rates rising in both countries, growth differences between them will come into play to dictate the pair’s direction.

GBP/USD key technical levels

GBP/USD

Panorama
Last Price Today 1.2003
Today’s Daily Change -0.0046
Today’s Daily Change % -0.38
Today’s Daily Opening 1.2049
Trends
20 Daily SMA 1.2113
50 Daily SMA 1.2109
100 Daily SMA 1.2394
200 Daily SMA 1.2891
levels
Previous Daily High 1.2144
Previous Daily Minimum 1.2028
Previous Maximum Weekly 1.2277
Previous Weekly Minimum 1.2048
Monthly Prior Maximum 1.2246
Previous Monthly Minimum 1,176
Daily Fibonacci 38.2% 1.2072
Daily Fibonacci 61.8% 1.2099
Daily Pivot Point S1 1.2004
Daily Pivot Point S2 1.1958
Daily Pivot Point S3 1.1888
Daily Pivot Point R1 1.2119
Daily Pivot Point R2 1.2189
Daily Pivot Point R3 1.2234

Source: Fx Street

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