GBPUSD pair rises slightly during Friday’s Asian session.
The GBPUSD pair rises slightly during Friday’s Asian session and pulls away from a one-and-a-half-week low. Which was reached the day before in the 1.2840-1.2835 range. Spot prices. On the other hand, are currently trading close to the 1.2880 area, up slightly more than 0.10% for the day. But there is no follow-through purchasing or bullish conviction.
The US Dollar (USD) is proving out to be a crucial element in lending as it consolidates the overnight strong advance. Up to almost a one-week high. the GBPUSD pair with some support. The positive US macro statistics issued on Thursday. Which continue to show resilience in the US labor market and support expectations for additional Federal Reserve (Fed) policy tightening. Suggests that the USD’s potential downside is constrained. Investors are still doubtful if the Fed would stick to its prediction of raising interest rates by 50 basis points. By the end of this year or adopt a more dovish policy posture.
The much-anticipated FOMC policy decision, slated to be released next Wednesday, will therefore continue to be the center of attention. A milder risk tone could help the safe-haven Greenback even more in the interim. On the other hand, the British Pound (GBP) might continue with weaker UK consumer inflation data announced this week, which reduced pressure on the Bank of England (BoE) to raise interest rates more quickly, are to blame for its relative underperformance. This could prevent traders from setting up for any significant appreciation in the GBPUSD pair.
GBPUSD Technical Outlook
Technically, spot prices manage to go back above the 50% Fibonacci retracement level of the June-July surge and remain below the 4-hour chart’s 100-period Simple Moving Average (SMA). The GBPUSD pair appears to have temporarily halted its recent decline from the level reached last week, which was the highest level since April 2022.
However, any further upward movement is likely to encounter significant resistance close to the 1.2900 round-figure level. It is susceptible to losing steam rather quickly close to the 38.2% Fibo level, in the 1.2930-1.2935 area.
A prolonged strength beyond the latter will indicate that the corrective downturn has run its course and open the door for more gains, especially given that oscillators on the daily chart are still holding in the positive region.
The GBPUSD pair may then pick up speed in the direction of regaining the psychological level of 1.3000, which also happens to be the 23.6% Fibo level and ought to serve as a turning point. This will cause some follow-through purchasing and return the short-term tilt to optimistic traders.
On the other hand, the 4-hour chart’s 100-period SMA, which is now located in the zone of 1.2855 and 1.2850, appears to be protecting the downside today. An effective break Below the 1.2800 level, the 61.8% Fibo level may be exposed, and the GBPUSD pair may decline faster into the next significant support area near the 1.2750-1.2745 zone on its way to the 1.2700 round figure and the 1.2685-1.2680 region.