The U.S. dollar fell on Wednesday as the US central bank said it might lower interest rates by 2024. That enabled the British pound regain territory lost following a weak British GDP data on Wed. The GBPUSD cross continued to rise.
GBPUSD Key Points
The GBPUSD pair rose 0.43 percent on Wednesday afternoon, closing at $1.26169. mark.
The BoE will announce its last fiscal policy statement for 2023 on Thurs.
Following in the session, US unemployment claims & sales at retail will be discussed.
Spotlight on the Bank of EoE’s monetary policy decisions
The BoE will be under the limelight on Thursday. Following the FOMC forecasts and presser. Traders anticipate the Bank of England to maintain the benchmark rate at 5.25 percent. In the absence of an unexpected decision by the Bank of England, the attention is going to be upon the FOMC Minutes including the vote number.
Additional vote for a rate drop might be seen as a softer stance by markets. Nevertheless, the minutes of meetings must be reviewed. The exact time frame of a rate decrease, as well as the forecast for pricing as well as the economy, remain hot topics
The US Dollar falls as a result of Powell’s pivotal stance
The Fed kept the key rate unchanged on Wednesday, as predicted. The Fed Chairman abruptly shift, hinting that the US Fed anticipated to cut rates multiple times during 2024. Seemed rather startling. This estimate follows shortly after Powell stated that speculating on the proposed date of rate reduction would be considered “too soon”. While claiming the prospect remained ajar for additional raises. The rate announcement stated that inflation “may have decreased ended the prior year. Yet stays higher,” implying that inflation is still on the rise, albeit the struggle is far from done.
Retail Sales in the United States and Unemployment Claims
Investors will be watching sales at retail and first unemployment claims in the United States today. The Retail sales ought to have greater impact unless there is a sudden rise in US unemployment filings.
The current US employment report revealed tighter job market circumstances. Which supports a favorable picture for consumer expenditure. A rise in spending by consumers would contribute to driven by demand price increases. Necessitating the Federal Reserve’s ability to keep rates on the rise.
A rate hike could increase the cost of borrowing, reducing consumer expenditure. Spending by customers falling would decrease based on demand inflationary pressures.
US Retail sales are expected to dip 0.1 percent in the month of November. Following a 0.1 percent drop in the month of October, according to analysts.
Outlook for the immediate future
The GBPUSD’s short-term price patterns will be determined by the BoE’s policy choice as well as future direction. A pledge to hold rates of interest at 5.25 percent until 1st Half of 2024 may tip the policy of monetary dispersion to the advantage of the Sterling.
Technical Analysis: Daily GBPUSD Price Movement Indicator
The GBPUSD price index maintained over the 50 & 200-day moving averages, confirming positive price indications. A gain in the GBPUSD towards the $1.27000 mark would set off the $1.28013 barrier area.
Nevertheless, a break of the $1.26000 mark could set off the 50 (D- EMA) into the $1.24410 supporting zone.
The 14-time frame every day RSI value of 61.18 suggests that the duo will climb to $1.27 mark prior to hitting overheated zone.
The 4-Hour Time Diagram Measures.
The GBPUSD was trading over the 50 & 200 day moving averages, confirming positive pricing signs. A rebound of the unit over $1.27 could encourage an advance towards the $1.28013 barrier area.
A close under the 50 (D-EMA), on the other hand, could allow the sellers an opening to the 200 (d- EMA) with key $1.24410 supporting zone. The 14-time frame RSI measured on the 4-hour Graph is at 63.54 level. Indicating that the sterling versus the US dollar will rebound to $1.27 prior hitting overvalued zone.
