GBP/USD rises to two-week highs and approaches the 1.1650 zone

- Advertisement -
  • GBP/USD rises sharply on Friday amid widespread USD weakness.
  • Risk appetite weighs on the safe-haven USD.
  • Expectations of the Fed’s aggressive rate hike and gloomy UK economic outlook could limit the pair’s gains.

The pair GBP/USD gains strong positive traction on Friday and continues to climb higher during the early part of the European session. Momentum lifts the pair to a one and a half week high, near the 1.1650 regionand is supported by the selling tone surrounding the US dollar.

A good risk sentiment recoveryas shown by the positive tone surrounding stock markets, drags safe-haven USD lower, with the dollar index retreating from two-decade highs hit earlier this week. In fact, the key dollar index falls to a new monthly low, which turns out to be a key factor for the intraday momentum of the GBP/USD pair to the upside.

- Advertisement -

On the other hand, the British pound receives the support for new UK Prime Minister Liz Truss’s plans to cap energy bills for the next two years, which is considered a positive development for households. That said, the worsening outlook for the UK economy could continue to act as a headwind for sterling. Apart from this, the very aggressive Fed expectations should limit the corrective pullback in the dollar and limit the GBP/USD pair.

The markets seem convinced that the Fed will maintain its aggressive tightening policy to control inflation and have been pricing in a higher probability of a 75 basis point rate hike at the September meeting. Expectations were bolstered by hawkish comments from Fed Chairman Jerome Powell on Thursday, which underpinned elevated US Treasury yields.

- Advertisement -

Therefore, it will be prudent to wait for strong continuation buying before confirming that the GBP/USD has formed a short-term bottom around the 1.1400 level and positioning for further upside. In the absence of major economic releases, speeches from Fed officials could weigh on the dollar during the early part of the American session and give the GBP/USD pair some momentum.

GBP/USD technical levels

GBP/USD

Overview
last price today 1.1636
Today I change daily 0.0131
Today’s daily variation in % 1.14
Daily opening today 1.1505
Trends
daily SMA20 1.1759
daily SMA50 1,193
daily SMA100 1.2172
daily SMA200 1.2755
levels
Previous daily high 1.1561
Previous Daily Low 1,146
Previous Weekly High 1.1761
Previous Weekly Low 1.1496
Previous Monthly High 1.2294
Previous Monthly Low 1.1599
Daily Fibonacci of 38.2%. 1.1499
Fibonacci 61.8% daily 1.1522
Daily Pivot Point S1 1.1456
Daily Pivot Point S2 1.1408
Daily Pivot Point S3 1.1356
Daily Pivot Point R1 1.1557
Daily Pivot Point R2 1.1609
Daily Pivot Point R3 1.1658

Source: Fx Street

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Hot Topics

Related Articles