GBP shows recovery amid dovish Fed stance—eyes on US CPI, UK GDP data. Technicals signal a potential rebound in GBP/USD.
The British pound shows signs of recovery after weeks of losses, partially due to scaled-back expectations of a US Federal Reserve rate hike. Recent dovish remarks from key Fed officials, including Dallas Fed President Lorie Logan, Fed Vice Chair Philip Jefferson, and Atlanta Fed President Raphael Bostic, have led to a decrease in market expectations of a rate hike next month. The failure of the US dollar to attract significant safe-haven bids amidst rising geopolitical tensions suggests that interest rates and monetary policy are crucial drivers in the current market context.
GBP Rebounds – Eyes on US CPI and UK GDP Data
The focus is now on the upcoming US Consumer Price Index (CPI) data, with a moderate decrease in inflation rates potentially leading to the unwinding of long USD positions. Additionally, UK GDP data, scheduled for release on Thursday, could impact the pound’s performance, especially against the US dollar. Any improvement in the UK economy might prompt a reassessment of speculative positions.
GBP/USD has shown a positive trend, indicating a potential recovery. The currency pair challenges crucial resistance at 1.2275; breaking it could dispel immediate bearish pressures. However, until such a breakout occurs, the path of least resistance remains sideways in the short term.
Returning from the mid-July high of 0.8700 confirms the EUR/GBP pair’s position within its June-established range. The pair will likely retest the converged floor on a horizontal trendline from June, indicating a downward bias.
GBP/AUD has experienced a mild recovery, surpassing minor resistance at the end-September high of 1.9125. The focus is now on the 200-period moving average around 1.9300, a significant barrier to cross. Further gains could be possible if the pair breaks above this average, potentially leading to a move towards the early-September low of 1.9450.