- GBP/USD retreats at the start of a new week amid modest USD strength.
- The fundamental background supports the prospects for a new depreciation movement.
- A drop towards the 1.2960 confluence support looks like a distinct possibility.
The GBP/USD pair struggles to capitalize on a two-day recovery move from the 1.2975 area, or a near two-month low hit last Thursday, and begins the new week on a softer note. Spot prices are currently trading just below the mid-1.3000 zone and appear vulnerable to prolonging the recent pullback from the 1.3435 region, or the highest level since March 2022.
The US dollar (USD) is attracting some buyers on dips at the start of a new week and reversing a portion of Friday’s losses amid expectations that the Federal Reserve (Fed) will proceed with modest rate cuts over the next year. The British Pound (GBP), on the other hand, is undermined by rising expectations of interest rate cuts by the Bank of England (BoE) in November and December. This, in turn, adds credibility to the negative short-term outlook for the GBP/USD pair.
From a technical perspective, the recent break of the 50-day SMA and subsequent drop below the 50% Fibonacci retracement level of the August-September bullish move was seen as a new trigger for the bears. Furthermore, the oscillators on the daily chart remain in negative territory and are still far from being in oversold territory, suggesting that the path of least resistance for the GBP/USD pair is to the downside.
Therefore, follow-on weakness below the 1.3000 psychological level, towards testing the 1.2960-1.2955 confluence support, looks like a distinct possibility. The latter comprises the 100-day SMA and the 61.8% Fibonacci level, which if broken should pave the way for a decline towards the round figure of 1.2900 en route towards the horizontal support of 1.2860.
On the other hand, a recovery attempt beyond the 1.3100 level will likely face resistance near the 1.3135 region, or the 38.2% Fibonacci level. This hurdle now coincides with the 50-day SMA and should act as a key point. Sustained strength beyond could shift the bias in favor of the bulls and allow the GBP/USD pair to reclaim the 1.3200 level. The upward move could further extend towards the strong breakout point of the 1.3250 horizontal support.
GBP/USD daily chart
US Dollar PRICE Today
The table below shows the percentage change of the US Dollar (USD) against major currencies today. US dollar was the strongest currency against the Australian dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.05% | 0.08% | -0.16% | -0.01% | 0.14% | -0.02% | 0.08% | |
| EUR | -0.05% | -0.04% | -0.28% | -0.01% | 0.05% | -0.19% | -0.05% | |
| GBP | -0.08% | 0.04% | -0.23% | -0.09% | 0.07% | -0.11% | -0.05% | |
| JPY | 0.16% | 0.28% | 0.23% | 0.14% | 0.30% | 0.18% | 0.18% | |
| CAD | 0.01% | 0.00% | 0.09% | -0.14% | 0.06% | 0.05% | -0.04% | |
| AUD | -0.14% | -0.05% | -0.07% | -0.30% | -0.06% | -0.09% | -0.14% | |
| NZD | 0.02% | 0.19% | 0.11% | -0.18% | -0.05% | 0.09% | 0.05% | |
| CHF | -0.08% | 0.05% | 0.05% | -0.18% | 0.04% | 0.14% | -0.05% |
The heat map shows percentage changes for major currencies. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you choose the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change shown in the box will represent USD (base)/JPY (quote).
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
