Following the lead of other risk-sensitive currencies, GBP/USD is giving way to renewed buying pressure on the Greenback, keeping the trade around 1.2630 ahead of remarks from Fed policymakers and President Trump.
The Relative Strength Index (RSI) indicator on the 4-hour chart stays above 50 and GBP/USD holds comfortably above 1.2650, where the 100-day Simple Moving Average (SMA) is located. As long as 1.2650 stays intact as support, technical buyers are likely to retain control of the pair's action.
On the upside, 1.2700-1.2710 (round level, static level) aligns as first resistance before 1.2750 (static level) and 1.2800 (static level, beginning point of the latest downtrend).
Looking south, supports could be seen at 1.2650 (100-day SMA), 1.2600 (static level, round level), and 1.2550-1.2540 (100-period SMA on the 4-hour chart, Fibonacci 61.8% retracement of the latest downtrend).
Fundamental Overview
The US Dollar (USD) benefited from the risk-averse market atmosphere in the American session on Wednesday and caused GBP/USD to edge lower. The uncertainty surrounding US President Donald Trump's trade policy forced investors to adopt a cautious stance midweek. Trump said that they are planning to impose tariffs on European imports. Although he noted that they will share details on EU tariffs soon, he explained that they are planning to impose 25% tariffs on autos and some other goods.
Trump is scheduled to meet British Prime Minister Keir Starmer later in the day and hold a joint press conference afterward. Trump and Starmer are expected to discuss the US' involvement in providing security guarantees for Ukraine once there is a peace agreement with Russia.
Weekly Initial Jobless Claims and January Durable Goods Orders will be featured in the US economic calendar on Thursday. Markets expect the number of first-time applications for unemployment benefits to edge higher to 221,000 in the week ending February 22, from 219,000 in the previous week. A bigger-than-expected increase in this data could hurt the USD with the initial reaction. Additionally, the US Bureau of Economic Analysis will release the second estimate of the fourth-quarter Gross Domestic Product (GDP) growth.
Comments