GBP/USD Makes a Strong Comeback Above 1.2600
- GBP/USD surged above the 1.2600 level on Wednesday, marking a significant breakthrough.
- The pair is now eyeing a fresh test of 1.2700, although economic data remains limited.
- US markets will be quiet due to the Thanksgiving holiday, with UK data also thin next week.
GBP/USD showed resilience on Wednesday as it climbed back above the 1.2600 mark, driven by a general weakening of the US Dollar’s recent strength. The UK economic calendar is light on data, and after the release of US data on Wednesday meeting expectations, the market is expected to remain subdued for the rest of the week.
Investors should anticipate reduced market activity on Thursday and Friday as US markets will be closed for the Thanksgiving holiday, with shortened trading hours on Friday. The UK data schedule for the following week is also sparse, with attention turning to the US Nonfarm Payrolls report next Friday, along with preliminary employment data that could impact market sentiment.
The US Gross Domestic Product (GDP) grew by 2.8% in the third quarter, in line with expectations, while the Core Personal Consumption Expenditure Price Index (PCEPI) rose to 2.8% year-over-year in October. Despite concerns about inflation impacting future rate cuts, the expected increase in inflation was well-received, especially as monthly figures remained stable at 0.3% month-on-month.
GBP/USD Price Outlook
Following Wednesday’s rebound, GBP/USD is now targeting the 1.2700 level, with a nearly 1% gain during the day’s trading session. This upward momentum could signal a reversal for GBP/USD bulls after a 7% decline from September’s peak at 1.3434. However, the 200-day Exponential Moving Average (EMA) near 1.2835 could pose a challenge for further gains.
GBP/USD Daily Chart
Canadian Dollar FAQs
- The Bank of Canada (BoC) plays a key role in setting interest rates that impact the Canadian Dollar (CAD).
- The price of Oil, Canada’s main export, also influences the CAD’s value.
- Inflation, economic health, and trade balance are other factors affecting the CAD.
Understanding the factors that drive the Canadian Dollar (CAD) can provide insights into its movements:
- Bank of Canada (BoC): The BoC sets interest rates that affect lending and inflation levels, influencing the CAD positively with higher rates.
- Oil Prices: As Canada’s major export, Oil price fluctuations directly impact the CAD value, with higher prices strengthening the currency.
- Inflation and Economic Data: Inflation can attract global investors, boosting CAD demand, while strong economic indicators support a stronger CAD.
By considering these factors, investors can gain a better understanding of the Canadian Dollar’s movements and make informed decisions in the forex market.