- GBP/USD attracts some intraday selling after an initial rally that saw it reach a four-day high.
- Recession fears and hawkish expectations around the Fed act as a tailwind for the USD and limit the pair’s gains.
- Traders are looking forward to testimony from Fed Chairman Jerome Powell before entering directional positions.
He GBP/USD fails to capitalize on its positive intraday move towards a four-day high and meets new selling near the 1.2065 region on Tuesday. At the time of writing, the pair falls to new daily lows, near the 1.2000 leveland remains at the mercy of the price dynamics of the US dollar.
The generally positive tone in equity markets, coupled with the decline in US Treasury yields, weighed on the safe-haven USD initially and offered some support to GBP/USD. However, recessionary risks continue to dampen any upbeat move in markets. Apart of this, prospects for further tightening of monetary policy by the Federal Reserve They act as a tailwind for US bond yields, which in turn offer support to the dollar and limit the pair’s upside, at least for now.
Investors seem convinced that the US central bank will maintain its aggressive stance and will keep raising interest rates for longer due to the persistent rise in inflation. These expectations were bolstered by US macroeconomic data, which indicated that inflation is not declining as fast as expected and pointed to an economy continuing to hold up despite rising borrowing costs. On the other hand, a number of FOMC policymakers recently backed rate hikes and opened the door to a 50 basis point hike at the March meeting.
Hence the markets continue pending semi-annual statements to Congress by Fed Chairman Jerome Powell, Tuesday and Wednesday. Investors will be looking for clues as to the Fed’s future rate hike path, which will play a key role in influencing near-term dollar price dynamics and provide further directional momentum to GBP/USD. Meanwhile, Anxiety over the new UK-EU Brexit deal over the Northern Ireland Protocol seems to further curb bulls when opening new positions around the pair.
Meanwhile, price developments indicate that a further rate hike by the Bank of England (BoE) is already fully discounted in the markets. Furthermore, some analysts continue waiting for the UK central bank to interrupt the current tightening cycle. This, in turn, suggests that the path of least resistance for GBP/USD is down and any significant rise could be seen as a selling opportunity. That being said, sustained weakness below the 200-day SMA is needed to confirm a further break down.
GBP/USD technical levels to watch
GBP/USD
Panorama | |
---|---|
Last Price Today | 1.2012 |
Today’s Daily Change | -0.0007 |
Today’s Daily Change % | -0.06 |
Today’s Daily Open | 1.2019 |
Trends | |
---|---|
20 Daily SMA | 1.2047 |
SMA of 50 Daily | 1,214 |
SMA of 100 Daily | 1.1992 |
SMA of 200 Daily | 1.1913 |
levels | |
---|---|
Previous Daily High | 1.2049 |
Minimum Previous Daily | 1.1993 |
Previous Weekly High | 1.2143 |
Previous Weekly Minimum | 1.1922 |
Maximum Prior Monthly | 1.2402 |
Minimum Prior Monthly | 1.1915 |
Daily Fibonacci 38.2% | 1.2014 |
Daily Fibonacci 61.8% | 1.2028 |
Daily Pivot Point S1 | 1.1992 |
Daily Pivot Point S2 | 1.1964 |
Daily Pivot Point S3 | 1.1936 |
Daily Pivot Point R1 | 1.2047 |
Daily Pivot Point R2 | 1.2076 |
Daily Pivot Point R3 | 1.2103 |
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.