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GBP/USD lacks any solid intraday direction

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GBP/USD holds steady above 1.2600, bulls seem uncommitted despite softer USD

The GBP/USD pair is looking to capitalize on the previous day’s good bounce around 50 pips from the 1.2570 region and is oscillating in a narrow range during Friday’s Asian session. Spot prices are currently trading near the upper end of the weekly range, around the 1.2620 area, drawing support from a slight decline in the US dollar (USD).

The USD Index (DXY), which tracks the greenback against a basket of currencies, is extending its sideways consolidation price move as traders seek more clarity on the timing and pace of interest rate cuts by the Federal Reserve (Fed). Additionally, the underlying bullish tone in global equity markets is further undermining the safe-haven Greenback and acting as a tailwind for the GBP/USD pair, although the lack of follow-on buying calls for caution before positioning for further gains. Read more…

GBP/USD loses ground after strong US jobs data

On Thursday, the GBP/USD pair fell towards the 1.2615 level, indicating modest losses with positive US labor market data benefiting the dollar with Claims without work coming in lower than expected from the week ending February 3. However, the Bank of England (BoE) is taking a somewhat similar stance to the Federal Reserve (Fed) in delaying rate cuts, so losses can be limited.

In addition, markets are forecasting a 100 basis point rate cut over the next 12 months, starting in June, while investors see a 125 basis point increase in Fed easing in 2024, suggesting losses from the pound may be limited. However, everything will depend on the incoming data, as it will shape expectations for future decisions. Next up next Tuesday, the US will release January inflation numbers, while the UK will reveal key labor market data that can likely set the pair’s pace for the coming sessions. Read more…

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