GBP/USD drops further to 1.3890, but secures weekly gains

Dollar gains momentum late on Friday and trims weekly losses.
Cable heads for biggest weekly gain since May.
Next week’s key events: NFP and Bank of England meeting.
The GBP/USD did not hold to gains on Friday and tumbled to 1.3890, reaching rock bottom levels since Wednesday. Despite the decline, cable is close to post the most important weekly gain since early May, boosted by a weaker US dollar across the board.

The greenback gained momentum late on Friday, into the London fix and trimmed weekly losses. The dollar rose whilst US yields dropped. Economic data from the US didn’t surprise market participants. The relevant report was the PCE Core index that rose 0.4% in June, below the 0.6% of market consensus.

GBP/USD is hovering around 1.3900/10, at an equivalent level of the 20-week simple moving average. The failure to interrupt above and hold could show signs of some exhaustion on the upside, favoring a correction. The 1.3730 area emerges again as a relevant support. A firm break above 1.4000 next week, should clear the thanks to more gains.

From the Fed to BoE and NFP
The US dollar didn’t enjoy FOMC events. From Wednesday until late on Friday, it fell across the board. Next week, the key report are going to be the Nonfarm Payroll report. “Payrolls probably surged again in July, with the pace up a touch from the +850k in June. Some acceleration within the private sector is usually recommended by the Homebase data, while government payrolls probably benefited from favorable seasonal adjustments. We forecast another 0.3% m/m rise in average hourly earnings. The 12-month change is probably going to rise again to three .8% from 3.6% in June”, wrote analysts at TD Securities.

In the UK, attention continues to get on COVID-19 developments. If cases accelerate, it could hurt market optimism on the economic recovery. Next week, the Bank of England will meet. No change in monetary policy is predicted . “We became more confident in our bullish GBP outlook. While there’s a risk that the BoE could disappoint hawkish expectations next week, any GBP weakness should be temporary”, mentioned MUFG Bank analysts.

Technical levels
GBP/USD
OVERVIEW
Today last price 1.3905
Today Daily Change -0.0054
Today Daily Change % -0.39
Today daily open 1.3959

TRENDS
Daily SMA20 1.381
Daily SMA50 1.3952
Daily SMA100 1.3924
Daily SMA200 1.3731

LEVELS
Previous Daily High 1.3982
Previous Daily Low 1.3898
Previous Weekly High 1.3787
Previous Weekly Low 1.3572
Previous Monthly High 1.4249
Previous Monthly Low 1.3787
Daily Fibonacci 38.2% 1.395
Daily Fibonacci 61.8% 1.393
Daily Pivot Point S1 1.3911
Daily Pivot Point S2 1.3863
Daily Pivot Point S3 1.3827
Daily Pivot Point R1 1.3994
Daily Pivot Point R2 1.403
Daily Pivot Point R3 1.4078

admin

Read Previous

Gold Price Analysis: XAU/USD slides to $1,820 area, downside seems limited

Read Next

Gold Price Forecast: XAU/USD eyes deeper losses if $1805 support caves in – Confluence Detector

Leave a Reply

Your email address will not be published. Required fields are marked *