USD/GBP Advances Around 1.3670 As US T-Yields Rise

The GBP/USD pair stays quiet on Thursday, October 14th, 2021. The pair centralizes advances after hitting the intraday peak at around 1.3672. The GBP/USD is currently moving at 1.3664, up 0.03 percent on the day. The area had a roughly 90-pip shift in the prior period on a wide-ranging USD sale. The Dollar fell from its annual high near 94.50 after the US Consumer Price Index (CPI) was reported higher at 5.4 percent in September, outperforming expectations. Moreover, markets braced up for the Fed’s trimming as soon as November, per the transcripts of the September FOMC deliberations.

At present, the 10-year Treasury note yields in the United States are rising near 1.55 percent, assisting the Dollar to maintain 94.00 in a risk-on mindset. It is important to note that S&P 500 Futures is moving at 4,370, up 0.34 percent for the day. But on the other side, the Pound sterling advances were restrained after the data indicated that the UK’s GDP increased 0.4 percent in August amid hopes the Bank of England (BOE) would boost interest rates as early as December.

In conjunction with that, the UK’s Brexit Minister, David Frost, held a softer posture towards the European Union’s (EU) offer to remedy post-Brexit turbulence in Northern Ireland, as the two parties readied for fresh discussions. Until then, traders concentrate their emphasis on the Bank of England (BOE) Credit Condition Survey and the US Initial Unemployment Rate Claims to evaluate investor confidence.

Description Of The Technical Aspects

USD/GBP CHART Tradingview.com

On the four-hour scale, there is a positive move in the relatively close technical landscape, with the Pound/Dollar maintaining its position above the 20, 50, and 100-period simple moving averages. Aside from that, the Relative Strength Index (RSI) signal continues to trade above 50, indicating that buyers are beginning to show an interest in the British pound.

On the upswing, the very first level of resistance appears around 1.3650 (the current level), followed by 1.3675 (the previous high of October 11) and 1.3700. (Psychological level, 200-period SMA). Support appears to have been established at the 1.3610-00 level, which includes the Fibonacci 23.6 percent retracement of the most recent upswing as well as the 100-period simple moving average. Investors may wish to justify 1.3580 (Fibonacci 38.2% retracement) and 1.3540 (Fibonacci 50% retracement) if the price falls below that level.

Review Of The Fundamentals

Newfound Brexit confidence appears to have helped the pound recover some of its early-week losses. The EU would propose eliminating up to 50% of border checks on British products at the Northern Ireland border, according to multiple news outlets. However, despite these changes, the UK’s FTSE Index is moving in the red on Wednesday.

A month after falling by 0.1 percent in July, the UK’s Gross Domestic Product (GDP) increased by 0.4%, beating economists’ expectations of 0.5%. Ahead of expectations, the UK’s Office for National Statistics stated that Industrial and Manufacturing Production grew faster than projected. However, if Brexit stories help the pound find demand, GBP/USD may hold up well.

Leave a Reply

Your email address will not be published.