GBP/USD Faces Bearish Pressure Amid USD Strength and Fed Comment
GBP/USD Faces Bearish Pressure Amid USD Strength and Fed Commentary
Throughout the Asian session on Wednesday, GBP/USD navigated within a narrow channel around 1.2300 before succumbing to renewed bearish forces in the European morning, dipping to approximately 1.2275, driven by the prevailing strength of the US Dollar (USD).
With a dearth of high-impact data releases, the USD maintained its resilience against major counterparts, buoyed by the recovery of US Treasury bond yields and a cautious market sentiment.
Later in the day, investor focus will center on remarks from Federal Reserve (Fed) officials. On Tuesday, Minneapolis Fed President Neel Kashkari emphasized the reliance on inflation and labor data for future policy decisions, while Chicago Fed President Austan Goolsbee highlighted the need to sift through abundant data before the December meeting.
Despite the Fed's emphasis on a data-dependent policy approach, there has been no explicit pushback against the market's expectation of no change in interest rates in December. If policymakers continue with this stance, the USD may encounter challenges in outperforming its peers in the short term.
From a technical perspective, our analysis suggests a new bearish impulse for GBP/USD today, with an initial target set at 1.2200.
Our preference
Short positions below 1.2400 with targets at 1.2200 & 1.2150 in extension.
Throughout the Asian session on Wednesday, GBP/USD navigated within a narrow channel around 1.2300 before succumbing to renewed bearish forces in the European morning, dipping to approximately 1.2275, driven by the prevailing strength of the US Dollar (USD).
With a dearth of high-impact data releases, the USD maintained its resilience against major counterparts, buoyed by the recovery of US Treasury bond yields and a cautious market sentiment.
Later in the day, investor focus will center on remarks from Federal Reserve (Fed) officials. On Tuesday, Minneapolis Fed President Neel Kashkari emphasized the reliance on inflation and labor data for future policy decisions, while Chicago Fed President Austan Goolsbee highlighted the need to sift through abundant data before the December meeting.
Despite the Fed's emphasis on a data-dependent policy approach, there has been no explicit pushback against the market's expectation of no change in interest rates in December. If policymakers continue with this stance, the USD may encounter challenges in outperforming its peers in the short term.
From a technical perspective, our analysis suggests a new bearish impulse for GBP/USD today, with an initial target set at 1.2200.
Our preference
Short positions below 1.2400 with targets at 1.2200 & 1.2150 in extension.
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