GBP/USD rises towards 1.2390, rebounding from lows reached in the 1.2330 area

- Advertisement -
  • GBP/USD is almost flat as the US dollar has erased its previous gains and a boost from risk appetite.
  • US data showed that the housing market remains weak, putting a headwind for the dollar.
  • Fed’s Waller: Supports 25 basis point rate hikes, but doesn’t expect rate cuts by the end of the year.

The GBP/USD it wobbled during the North American session around the 1.2360-1.2390 zone around the London Fix, unable to get any clear direction. Risk appetite increased, which tends to favor the British pound (GBP), but weak UK economic data weighed on GBP/USD. At the time of writing, GBP/USD is trading at 1.2391.

GBP/USD fluctuates between gains and losses as the dollar retreats

Optimistic sentiment. The US dollar has pulled back from previous highs, as the Dollar Index shows, at 102.552, and is holding on to minuscule 0.05% gains around 102.103. Therefore, the GBP/USD pair rallied from daily lows around 1.2330, aiming to pare its earlier losses.

- Advertisement -

In terms of data, the US economic calendar revealed that Existing Home Sales fell 1.5% and reached its lowest level since 2010, as reported by the National Association of Realtors. The Federal Reserve (Fed) tightening cycle pushed the housing market into recession. But lately, some Fed officials have revealed their intentions to slow the pace of rate hikes, emphasizing the need to keep rates higher for longer.

Philadelphia Fed President Patrick Harker supports the idea of ​​raising rates at a slower pace, stating: “25 basis point hikes will be appropriate going forward.” Harker expects the US economy to grow 1% and that the unemployment rate jump from 3.5% to 4.5%. Later, KansasCiti Fed President Esther George said the Federal Reserve must be “patient” to see if inflation in the service sector subsides.

- Advertisement -

At the last minute, Christopher Waller, a member of the Fed Board, stated that the market’s perception of the terminal rate is not far from the situation of the Federal Funds rate (FFR) and added that the US Central Bank would have to keep rates high, “not cut rates by the end of the year.”

Meanwhile, UK Retail Sales for November fell sharply and sent GBP/USD lower. The figures showed sales fell 1% month-on-month, a sign that inflation and Bank of England (BoE) rate hikes are weighing on Britons. We also reported that UK consumer confidence fell for the first time in three months, returning to record lows.

What must be considered?

Next week in the UK the preliminary PMI manufacturing and services indices as well as the Producer Price Index (PPI) will be released. In the US, the preliminary indices for manufacturing and services, the advanced Gross Domestic Product (GDP) for the fourth quarter, the orders for durable goods and the inflation indicator preferred by the Fed, the core CPI, will be published.

GBP/USD Key Technical Levels

GBP/USD

Overview
Last price today 1.2388
Today I change daily 0.0001
today’s daily variation 0.01
today’s daily opening 1.2387
Trends
daily SMA20 1.2125
daily SMA50 1.2099
daily SMA100 1.1715
daily SMA200 1.1982
levels
previous daily high 1.2397
previous daily low 1.2313
Previous Weekly High 1.2249
previous weekly low 1.2086
Previous Monthly High 1.2447
Previous monthly minimum 1.1992
Fibonacci daily 38.2 1.2365
Fibonacci 61.8% daily 1.2345
Daily Pivot Point S1 1.2334
Daily Pivot Point S2 1.2281
Daily Pivot Point S3 1,225
Daily Pivot Point R1 1.2419
Daily Pivot Point R2 1,245
Daily Pivot Point R3 1.2503

Source: Fx Street

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Hot Topics

Related Articles