GBP/USD Analysis: Price Approaches Important Support

FXOpen

In November, the 1.25 level acted as resistance, but after a bullish breakout, it began to provide support (as shown by the black arrows).

However, recent events are increasing bearish pressure. Among them:

→ yesterday's news on inflation in the US, the values of which were in line with expectations. It is worth paying attention to Core CPI MoM, the values of which remain equal to 0.3%, or 3.6% in annual terms. This category includes prices for services where inflation is difficult to overcome. So Powell's oft-repeated words that “the path to 2% will be difficult” take on more relevance. Today, by the way, another speech by the head of the Fed is scheduled for 22:30 GMT+3. It will take place after the announcement of interest rates at 22:00 GMT+3, which is expected to remain unchanged.
→ news today that the UK economy contracted in October. GDP decreased by -0.3%, although -0.1% was expected. This could strengthen the case that the Bank of England at its meeting (tomorrow at 15:00 GMT+3) will signal a faster rate cut than in other countries.

The chart shows that the dollar continues to strengthen. The situation is similar to what is happening on the EUR/USD market, which we wrote about yesterday.

→ the GBP/USD rate is still in an ascending channel (shown in blue), but the bears are trying to push it;
→ the bulls can be supported by the psychological level of 1.25;
→ level 1.26 yesterday worked as resistance.

If the price consolidates below 1.25, this could indicate an important change in market sentiment and an increase in the likelihood of a bearish scenario, as indicated by the red arrows.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Market Analysis: GBP/USD Struggles While USD/CAD Aims Higher USD/JPY Technical Analysis: Yen Strengthens after Comments from Japanese Officials The American Currency Resumes Its Growth Australian Dollar Weakens amid Inflation News Exchange Rates Consolidate at the Beginning of the Week

Latest articles

Financial Market News

Weekly Market Wrap With Gary Thomson: CAC 40, AUD, OIL, AMAZON

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of  FXOpen UK, as he breaks down the most significant news reports and shares his expert insights. European Stock Markets on

Commodities

Price of Gold Briefly Exceeded $2,050 per Ounce

In addition to new records in the stock markets, the reaction to yesterday's news about inflation in the US was also a decrease in government bond yields and a rapid rise in the price of gold — the cost of XAU/

Indices

Nasdaq-100 Price Hits All-time High after 4 Straight Months of Gains

The Nasdaq-100 index is holding above 18,000 today following yesterday's bullish momentum, fueled by inflation news. The PCE consumer spending index amounted to 0.4% on a monthly basis, which was in line with analysts' expectations. A year ago,

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65.68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.