As the world’s top investment manager and financial market journalist, I bring you the latest update on the GBP/USD pair in the European session on Friday. The pair is hovering above 1.2850, with potential resistance at 1.2890-1.2900. Stay tuned as the BEA is set to release the PCE Price Index figures for June later today.
Analysis:
GBP/USD experienced a brief recovery during Thursday’s European trading hours before dipping to its lowest daily close in two weeks at 1.2850. The pair is currently showing modest gains as traders await the PCE Price Index data from the US.
The US GDP grew at a rate of 2.8% in the second quarter, surpassing analysts’ expectations and providing support for the US Dollar against its major counterparts. This strength in the USD has limited the upside potential for GBP/USD.
Looking ahead, the focus will be on the PCE Price Index data for June. Expectations are for a 0.1% increase in both the PCE Price Index and the core PCE Price Index. The GDP report indicated a 2.9% rise in the core PCE Price Index on a quarterly basis, slightly below the previous quarter but above estimates.
Market sentiment could play a crucial role in shaping currency movements, with early indications showing positive trends in the UK’s FTSE 100 Index and US stock index futures. If risk appetite remains strong, the USD may face pressure, potentially leading to a rebound in GBP/USD.
Technical Analysis:
GBP/USD faces resistance at 1.2890-1.2900, where the 100-period SMA and a descending trend line intersect. A break above this level could pave the way for further gains towards 1.2930-1.2940 and 1.3000. On the downside, support levels are seen at 1.2830 and 1.2800-1.2790.
Pound Sterling FAQs:
- GBP is the oldest currency in the world, with key trading pairs like GBP/USD and GBP/JPY.
- Monetary policy decisions by the Bank of England have a significant impact on the value of GBP.
- Economic data releases, such as GDP and trade balance, can influence the direction of the Pound Sterling.
Stay informed and keep an eye on upcoming data releases and market trends to make informed decisions in the ever-changing financial landscape.