GBP/USD moderate in familiar ranges around 1.3535

  • GBP/USD is sideways in a dovish session as investors brace for the US inflation report.
  • Risk-sensitive currencies rise, while the dollar falls 0.13% against its peers.
  • GBP/USD Technical Outlook: Neutral bias unless GBP bulls retake the 100 DMA at 1.3700.

The British pound remains subdued on Wednesday during the American session, rising as much as 0.02% on the day. At the time of writing this article, the pair GBP/USD it trades at 1.3539. The mood in financial markets is positive as European stock indices finished higher. On the other hand, US stock indices led by the tech-heavy Nasdaq Composite gain between 0.74% and 1.47%.

In the FX complex, risk-sensitive currencies led by antipodeans and CAD rise, followed by EUR and safe-haven pairs. The greenback extended losses for the day, with the US Dollar Index (DXY), a gauge of the dollar’s value against a basket of six currencies, down 0.13% at 95.51.

In the bond market, US Treasury yields retreat from weekly highs. In the case of the 10-year Treasury yield, it pulls back after hitting 1.97%, a level last seen in 2019. The 10-year Treasury is at 1.922% at press time, with a drop three basis points in the session as market participants prepare for the release of US inflation figures on Thursday.

A light economic docket in the US left GBP/USD traders adrift on Fed statements and market sentiment. At press time, Cleveland Fed President Loretta Mester (2022 voter) said she “expects inflation to moderate but remain above 2% this year and next.” It is worth noting that Mester is betting on a rate hike in March, followed by future rate hikes, which will guide the economy.

GBP/USD Price Forecast: Technical Outlook

GBP/USD has a neutral bias regardless of trading above the 50 and 100-day moving averages (DMAs) found at 1.3448 and 1.3505 each. However, the presence of the 200-DMA at 1.3702 keeps the GBP/USD bears in charge unless a challenge is launched at the aforementioned level.

To the upside, GBP/USD resistance levels would be the 1.3600 figure, followed by the three February highs at .13622, and then the 5-month downtrend line that passes close to the 200 DMA at 1.3700.

Conversely, the first GBP/USD support would be the 100 DMA at 1.3505. The break of the latter would expose the 50 DMA at 1.3448 and then 1.3400.

Additional technical levels

Source: Fx Street

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