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Wednesday, November 30, 2022

GBP/USD slides towards 1.2500 as US dollar strengthens

  • The US dollar remains strong amid higher US bond yields.
  • Less than expected US data, keep an eye on Fed and BoE
  • GBP/USD turns negative after being rejected by 1.2600.

GBP/USD broke below 1.2530 and dropped to 1.2505, reaching a new daily low. The pair remains close to lows, with a bearish tone across the board amid a strong US dollar.

Cable is cutting half of Friday’s gains and a break below 1.2500 will add to bearish pressure. The pound was rejected on Friday and again above 1.2600 on Monday, indicating that there is still momentum in the main bearish trend.

The US dollar rose after the start of the US session despite weaker-than-expected economic data. S&P Global and ISM Manufacturing PMIs fell below market consensus. The major report of the week will be on Friday, along with non-farm payrolls.

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Higher US yields and risk aversion are boosting the dollar. The US 10-year yield jumped to 2.99% and the 30-year jump jumped to 3.05%. DXY is up 0.40%, trading above 103.60. The Dow Jones is down 0.22% and the S&P 0.20% after falling sharply on Wall Street on Friday.

The major event ahead is the FOMC meeting. The Fed is expected to announce an increase of 50 basis points on Wednesday. The statement and Chairman Powell’s comments will likely increase volatility.

The Bank of England will also have its own monetary policy meeting. The general consensus is for a rate hike of 25bp. Danske Bank analysts expect the BoE to stick to its more sluggish cues, although higher-than-expected inflation and rising inflation expectations raise the possibility of a sharp turn. “The Bank of England remains concerned about the growth outlook and the BoE ultimately projected an increase in the unemployment rate in its February 2022 monetary policy report. If we are correct, however, about the BoE sticking to its sluggish cues, it is likely to weigh on GBP given the heavy market pricing,” he explained.

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technical level

GBP/USD

Observation

Today’s last price1.2519

Today’s daily change-0.0053

Today’s Daily Change %-0.42

Open daily today1.2572

trends

Daily SMA201.2924

Daily SMA501.3107

Daily SMA1001.3301

Daily SMA2001.3473

levels

Previous Daily High1.2615

Previous Daily Low1.245

Previous Weekly High1.2842

Previous Weekly Low1.2411

Previous Monthly High1.3167

Previous Monthly Low1.2411

Daily Fibonacci 38.2%1.2552

Daily Fibonacci 61.8%1.2513

Daily Pivot Point S11.2477

Daily Pivot Point S21.2381

Daily Pivot Point S31.2312

Daily Pivot Point R11.2641

Daily Pivot Point R21.271

Daily Pivot Point R31.2805

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