GBP/USD staged a recovery, trading around 1.2150 in Monday's Asian session after recent losses. The pair faces challenges amid shifting discussions on the Federal Reserve's monetary policy trajectory. The Relative Strength Index (RSI) on the 4-hour chart has dropped to 40, indicating a short-term bearish trend. Key for the pair is 1.2200 (psychological level, static support, Simple Moving Average 100 periods, SMA 50 periods).
Upon confirming 1.2200 as support, GBP/USD could extend the recovery towards 1.2250 (SMA 20 periods) and 1.2300 (Fibonacci retracement level of 23.6% from the latest downtrend).
Failure to hold above 1.2200 might indicate seller interest. Temporary support appears at 1.2170 (static level) followed by 1.2130 (static level) and 1.2100 (psychological level, static support).
GBP/USD faced a significant loss of over 100 pips on Thursday, erasing its gains from earlier in the week. On Friday, the pair stabilized around 1.2200.
The US Treasury yields rose higher on Thursday following the September inflation report, bolstering the US Dollar's strength against its counterparts. Although the US Bureau of Labor Statistics reported that the year-on-year Core Consumer Price Index (CPI), excluding food and energy fluctuations, decreased to 4.1% from the forecasted 4.3% in September, underlying details revived expectations for a more aggressive Federal Reserve rate hike by year-end. The so-called 'core inflation' surged by 0.6% monthly, indicating persistent challenges in taming inflation.
Upon confirming 1.2200 as support, GBP/USD could extend the recovery towards 1.2250 (SMA 20 periods) and 1.2300 (Fibonacci retracement level of 23.6% from the latest downtrend).
Failure to hold above 1.2200 might indicate seller interest. Temporary support appears at 1.2170 (static level) followed by 1.2130 (static level) and 1.2100 (psychological level, static support).
GBP/USD faced a significant loss of over 100 pips on Thursday, erasing its gains from earlier in the week. On Friday, the pair stabilized around 1.2200.
The US Treasury yields rose higher on Thursday following the September inflation report, bolstering the US Dollar's strength against its counterparts. Although the US Bureau of Labor Statistics reported that the year-on-year Core Consumer Price Index (CPI), excluding food and energy fluctuations, decreased to 4.1% from the forecasted 4.3% in September, underlying details revived expectations for a more aggressive Federal Reserve rate hike by year-end. The so-called 'core inflation' surged by 0.6% monthly, indicating persistent challenges in taming inflation.
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