The Pound Sterling Rebounds Against the US Dollar
- GBP/USD Looks to Central Bank Chiefs for Direction
- Dual Bear Crosses and Bearish RSI Threaten Pound Sterling Recovery
The Pound Sterling (GBP) has shown resilience by rebounding against the US Dollar (USD), breaking a two-week losing streak and pushing the GBP/USD pair back above the 1.2700 mark.
Pound Sterling Gains Momentum as USD Weakens
GBP/USD saw a turnaround as the USD faced pressure from fundamental factors in the US market, providing relief for Pound Sterling buyers. The week started with a jump on Monday, propelling the pair from a six-month low of 1.2488 set on November 22.
The Greenback’s downward trend was fueled by various events, including the appointment of a new Treasury Secretary by US President-elect Donald Trump and the announcement of tariffs on products from Mexico, Canada, and China. However, USD sellers returned mid-week, leading to a temporary halt in the GBP/USD recovery.
By Thursday, the US currency was still under pressure due to expectations of a rate cut by the US Federal Reserve in December, further supporting the Pound Sterling’s upward movement.
Looking Ahead: Bailey, Powell, and US Nonfarm Payrolls
The upcoming week is expected to be eventful, with a focus on labor data from the US. The UK economic calendar, on the other hand, lacks high-impact releases.
Key events to watch include appearances by Bank of England Governor Andrew Bailey and Federal Reserve Chairman Jerome Powell, along with the release of US Nonfarm Payrolls data on Friday.
GBP/USD: Technical Analysis
From a technical perspective, the GBP/USD pair faces downside risks as long as the RSI remains below 50. Dual Bear Crosses on the daily time frame indicate a negative outlook for the pair.
To initiate an uptrend, Pound Sterling needs to break above the 200-day SMA at 1.2820. On the downside, key support levels lie at 1.2600 and 1.2507.
Nonfarm Payrolls FAQs
- What are Nonfarm Payrolls?
- How do Nonfarm Payrolls impact the Federal Reserve?
- What is the correlation between Nonfarm Payrolls and the US Dollar?
- How do Nonfarm Payrolls affect the price of Gold?
- Are Nonfarm Payrolls the only component in a jobs report?
By analyzing these key components and understanding their implications, investors and traders can make informed decisions in the financial markets.