- GBP/USD rises more than 0.20% due to the deterioration of the economic outlook in the United States.
- Jobless claims exceeded expectations, indicating that the labor market is easing.
- Federal Reserve officials were against cutting interest rates next year, and investors price the Fed’s cuts at 88 basis points.
The British pound (GBP) is holding on to its previous gains against the US Dollar (USD) Thursday as the economy in the United States (US) deteriorates further, justifying any further tightening by the Federal Reserve. In terms of prices, the pair GBP/USD It jumped from daily lows at 1.2370 and is trading at 1.2447, up 0.26% on the day.
Sterling advances as US data weakens dollar, GBP/USD traders eye UK retail sales
Investor sentiment deteriorated after US economic data showed the economy is losing steam faster than expected. The US Department of Labor revealed that initial jobless claims last week increased by 231,000, above the 220,000 expected. Other data released by the US Federal Reserve indicated that Industrial Production in October contracted, hurt by the automobile strike.
Meanwhile, Federal Reserve spokespeople crossed the news, they are trying to deal with rate cut expectations, led by Cleveland Fed President Loretta Mester, who said the US central bank. It depends on the data on whether to raise rates further. Meanwhile, interest rate traders have priced in 88 basis points of rate cuts for 2024.
The rise in GBP/USD is also due to the general weakness of the Dollar. The Dollar Index (DXY) fell 0.01% to 104.38, hurt by falling US Treasury yields.
Apart from this, the latest UK inflation report revealed that consumer inflation fell to 4.6%, down from 6.7%, the lowest since October 2021. Even though the Bank of England (BoE) has insisted that rates must rise for longer, money market futures do not expect further rate hikes.
Ahead on the calendar, UK retail sales are expected to show a recovery after falling -0.9% in monthly data for September. Annually, estimates point to a contraction of -1.5%, worse than September data. In the US, housing data, building permits, and Fed speakers are expected to offer further impetus to GBP/USD traders.
GBP/USD Price Analysis: Technical Outlook
The daily chart shows the pair with a neutral to bullish bias, although GBP/USD failed to hold above the 200-day moving average (DMA) at 1.2440, which could compound a drop below the figure. 1.2400. Breaking this latest signal would expose GBP/USD to 1.2300, before testing the 50-DMA at 1.2256, with next support at the November 13 low at 1.2209. On the upside, if buyers reclaim the 200-DMA, the test of 1.2500 is possible.
|Latest price today||1.2416|
|Daily change today||0.0006|
|Today’s daily variation||0.05|
|Today’s daily opening||1,241|
|Previous daily high||1.2502|
|Previous daily low||1.2404|
|Previous weekly high||1.2429|
|Previous weekly low||1.2187|
|Previous Monthly High||1.2337|
|Previous monthly low||1.2037|
|Daily Fibonacci 38.2||1.2441|
|Fibonacci 61.8% daily||1.2464|
|Daily Pivot Point S1||1.2375|
|Daily Pivot Point S2||1,234|
|Daily Pivot Point S3||1.2277|
|Daily Pivot Point R1||1.2473|
|Daily Pivot Point R2||1.2537|
|Daily Pivot Point R3||1.2571|
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.