GBPUSD is moving away from a multi-week high and is under pressure from minor USD strength.
On Tuesday, the GBPUSD pair trades with a negative bias for the second day in a row. Retreating further from its highest level since mid-September. Around the 1.2425-1.2430 zone recorded the day before. Spot prices fell to a two-day low in the 1.2335-1.2330 range during the Asian session. Falling less than 0.10% on the day despite a lack of follow-through selling.
Before making new directional wagers, investors are now looking to remarks by important FOMC members.
The US Dollar (USD) is seen strengthening. After an overnight comeback. The rise from a near eight-week low has proven to be a crucial element imposing some pressure on the GBPUSD pair. Despite anticipation that the Federal Reserve (Fed) has reached the end of its rate-hiking cycle. Fewer dovish remarks by FOMC members contributed to a positive bounce in US Treasury bond yields on Monday. Aside from that, the safe-haven Greenback is supported by a minor decline in global risk sentiment. As evidenced by a softer tone surrounding equities markets.
The grim economic prognosis provided by the BoE hurts the GBPUSD and contributes to the slightly offered tone.
The British Pound (GBP) is being pulled down by the Bank of England’s (BoE) dismal prognosis. Which predicts that the UK economy will enter a recession next year. This, combined with the previous day’s failure near a technically crucial 200-day Simple Moving Average (SMA). Causes considerable concern. selling around the GBPUSD remains below the mid-1.2300s as the USD continues to recover from a multi-week low.
GBPUSD is retreating from a multi-week high. And is being pressured by small USD strength.
The BoE’s bleak economic forecast hits the GBP. And contributes to the slightly offered tone.
Investors are now looking for comments from key FOMC.
Investors are now looking for comments from key FOMC members before placing additional directional bets.
For the second day in a row, the GBPUSD pair trades with a negative bias, retreating further from its highest level since mid-September, near the 1.2425-1.2430 zone recorded the day before. Despite a paucity of data, spot prices sank to a two-day low in the 1.2335-1.2330 band during the Asian session, falling less than 0.10% on the day. of follow-through selling.
The US Dollar (USD) is anticipated rising. Following an overnight rally. Contributing to the moderately offered tone. As traders await further clues. Regarding the Fed’s likely rate hike path before positioning for the next leg of a directional move.
As a result, the spotlight will be on statements by prominent FOMC members. Notably Fed Chair Jerome Powell’s appearances on Wednesday and Thursday. Meanwhile, a new run lower in US Treasury bond yields may keep a lid on any further dollar gains and assist limit the GBPUSD pair’s downside. In the absence of any market-moving economic data from the UK or the US. The underlying backdrop suggests caution. must wait for considerable follow-through selling before declaring that spot prices have peaked.
