- The pound gains momentum in the market in the last hour.
- GBP/USD recovers after falling to the lowest since 2020.
- The mixed dollar, before wholesale inflation data.
GBP/USD broke above 1.3050 and rose to 1.3068, marking a new high for the day. The pair remains near the daily high, recovering after falling in the Asian session to 1.2999, the lowest level since November 2020.
The advance comes on the back of some dollar weakness ahead of the American session and US data. It also helps that stock markets have trimmed losses in recent hours, favoring the pound. Financial markets remain cautious with the continuation of the war in Ukraine.
In the US, the wholesale inflation data for February and the Empire index will be published. The focus is on the meeting of the Federal Reserve, which will announce its decision on Wednesday. On Thursday it will be the turn of the Bank of England. A rise in the interest rate is expected by both central banks.
In the United Kingdom, the February employment report was released, showing better-than-expected figures. The unemployment rate it fell to 3.9% and three-month average earnings rose 4.8% from a year ago, accelerating the rise.
short-term outlook
The GBP/USD has a positive tone in the very short term, although the dominant trend remains negative. The pound is bouncing off the 1.3000 level, a key support. The current move represents an upward correction.
Resistances above can be seen at 1.3075, then 1.3095 and 1.3140. If it retraces below 1.3050 the bullish tone will lose strength. Falling below 1.3000 could give an acceleration to the downside.
Technical levels
Source: Fx Street
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