Market news
19.05.2022, 15:17

GBP/USD laughs at risk aversion and hits two weeks highs above 1.2500

  • US dollar extends slide, DXY drops 1% to lowest in two weeks.
  • Rebound in Wall Street fades, Dow Jones falls by 1.10%.
  • GBP/USD rebounds sharply, back above the 20-day SMA.

The GBP/USD is rising on Thursday, making a full recovery from Wednesday’s slide even as the stock market stays in red and under pressure. The pair rose more than 150 pips from the daily low and recently hit 1.2512, the highest level since May 5.

Weaker greenback behind cable’s rally

A broad-based dollar weakness boosted GBP/USD. The DXY is falling by 1.05%, trading at two-week lows under 102.80 even as risk-off still remains in place. The FTSE 100 dropped 2.12% and in Wall Street, the Dow Jones falls 1.00%. The Nasdaq managed to climb to positive ground and gain 0.35%.

The demand for quality assets boosted government bonds. The US 10-year yield stands at 2.81%, significantly away from the 3% it reached on Wednesday. UK yields held in the recent range (10-year around 1.85%). The slide in yields weakened the dollar that is the worst performer in the G10 space on Thursday.

Economic data from the US showed Initial Jobless claims to the highest since January at 218K while Continuing Claims hit the lowest since 1970. The Philly Fed tumbled to 2.6 in May (against market consensus of 16). Existing Home Sales fell in April 2.4%. On Friday, the April Retail Sales report is due in the UK.

GBP/USD back above the 20-SMA

The rally in GBP/USD pushed the price back above the 20-day Simple Moving Average. The pound is having difficulties staying above 1.2500. A daily close clearly above would add support for an extension of the move to the upside.

A new failure here would expose again the 1.2330 low. Before that level, the 1.2400 zone offers interim support.

Technical levels

 

© 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.

AML Website Summary

Risk Disclosure

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.

Privacy Policy

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 pr@teletrade.global.

Feedback
Live Chat E-mail
Up
Choose your language / location