GBPUSD continues under pressure for the fourth day in a row, bouncing off an intraday low.
GBPUSD retests intraday lows as the US Dollar recovers from early Asian session losses ahead of Wednesday’s London open. As a result, the Cable pair had a four-day losing streak around 1.2415 as of press time.
The US Dollar is fighting bears, but bulls are hard to find amid a light schedule and a pre-Fed blackout.
Despite being hesitant on the day. The US Dollar Index (DXY) extends the previous day’s corrective rebound, climbing to 104.20 at the latest. As a result, the greenbacks against Six major currencies have suffered as a result of bearish market predictions. On the Fed’s future action during the policymakers’ pre-FOMC silence. Furthermore, recent speculation that the US government’s bond buying frenzy as a result of the debt-ceiling pact may spark a financial crisis. as signaled by the Financial Times (FT), appears to fuel the earlier risk-on sentiment. and sustain the US Dollar’s recovery.
Furthermore, interest rate futures suggest a roughly 20% possibility of a June rate rise. but the odds of a 25-basis point (bps) rate hike in July have recently climbed. which appears to favor Pound Sterling sellers. The cause might be related to the disappointing US activity statistics reported on Monday. as well as the Federal Reserve’s prior dovish statements. Officials from the Federal Reserve prior of the pre-Fed blackout.
On the other hand, the cautious mood ahead of UK Prime Minister Rishi Sunak’s US tour. as well as expectations that the British economy would be burdened by too high inflation and insufficient productivity growth. weigh on GBPUSD pricing.
“British Prime Minister Rishi Sunak will advocate for the deepening of economic ties between the United Kingdom and the United States. When he speaks to the country’s lawmakers and business representatives. During his trip to Washington D.C. this week,” according to a British Government news release.
Despite a recent corrective rally, the 10-year coupon remains slow at around 3.67%. While the two-year equivalent increased slightly to 4.50% at the latest. S&P500 Futures print minor gains. While reflecting the atmosphere by monitoring Wall Street’s performance.
Political news and Fed vs. BoE squabbles will steer Pound Sterling traders.
Moving forward, GBPUSD traders may be entertained by UK-US political stories. In addition to speculation regarding the next movements of the Bank of England (BoE) and the Federal Reserve (Fed).
Technical examination
A two-week-old rising support line combines the steady RSI (14) line. and the MACD’s retreating negative bias to confront GBPUSD bears near the 1.2400 round figure.
