The British pound pares Thursday’s gains and some more, is down some 0.50%, trading at 1.3232 during the New York session at the time of writing. A risk-off market mood prompted investors to drop anything with the word “risk” attached to it, benefitting safe-haven assets. In the FX market, the USD, the JPY, and the CHF are the most aided of the abovementioned and are the stronger currencies as we approach the Wall Street close.
In the last three hours, the pound bounced off Friday’s daily low around 1.3210s, towards 1.3240s, on a steady move that could have been prompted by USD profit-taking. Also, USD bulls failed to break the 1.3200 figure on the back of the not-so-bad November’s Nonfarm Payrolls report, which in the case of have been in line with estimations or better, the GBP/USD would indeed be trading at new YTD lows.
As reported earlier, the US economy added 210K new jobs, shorter than the 550K estimated by experts. The headline showed a worse than expected report, but the Unemployment Rate dropping from 4.5% to 4.2% reinforced that the labor market is improving but not at the pace required. Additionally, the Fed seems to pivot from the maximum employment goal towards tackling inflation, as Fed Chief Jerome Powell said on the week that inflation is no longer “transitory” and should be no longer used when speaking of elevated prices.
Therefore, as the Fed pivoted towards inflation, the US Consumer Price Index (CPI) for October on Friday of next week would be the primary driver for GBP/USD traders, followed by the University of Michigan Consumer Sentiment for November on its preliminary read.
In the UK economic docket, BoE’s speaking, Retail Sales, Manufacturing Production and GDP, would entertain GBP/USD traders.
In the 4-hour chart, the GBP/USD has a downward bias, as shown by the 4-hour simple moving averages (SMA’s), which have a downslope and reside above the spot price. Also, the 50-SMA has undergone three tests, and in each of those, the GBP has failed to break above it, leaving that level as a strong resistance level.
In the outcome of extending the downward move, the first support would be 1.3200. The breach of the latter would expose the November 30 low at 1.3194, followed by the 1.3100 figure.
Contrarily on the upside, the first resistance would be 1.3300. A break above that level would expose the 50-SMA at 1.3318, followed by the 100-SMA at 1.3374.
© 2000-2022. All rights reserved.
This site is managed by Teletrade D.J. Limited 20599 IBC 2012 (First Floor, First St. Vincent Bank Ltd Building, James Street, Kingstown, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at firstname.lastname@example.org.