GBP/USD: Pound Sterling recaptures weekly highs
The Pound Sterling (GBP) comes under pressure in Thursday’s early New York session due to Middle East tensions and mixed preliminary PMIs reported by the S&P Global/CIPS for February. The Manufacturing PMI at 47.1 was slightly above the prior reading of 47.0 but failed to match expectations of 47.5. The Services PMI was surprisingly unchanged at 54.3, while investors anticipated a decline to 54.1. The Composite PMI was higher at 53.3 against expectations and the former reading of 52.9.
The GBP/USD pair falls on backfoot as Bank of England (BoE) policymaker Swati Dhingra cautioned about downside risks to the United Kingdom economy due to high interest rates. In her speech at the Market News International Connect event on Wednesday, Dhingra said the demand prospects are “weak and less resilient” than their previous forecasts. She added that higher mortgage costs and rental prices in 2023 shortened households’ pockets, which resulted in weak Retail Sales. The Pound Sterling faces foreign outflows when a BoE policymaker warns about holding interest rates higher for a longer duration because it increases the possibility of interest rate cuts. Meanwhile, investors await February’s preliminary S&P Global PMI data for the United States, which will provide more insights into the economic outlook.
The Pound Sterling fails to continue its winning spell to a third trading session on Thursday. The GBP/USD pair falls significantly after kissing the round-level resistance of 1.2700. The overall trend remains sideways as the pair oscillates in the Descending Triangle pattern formed on the daily time frame. The aforementioned chart pattern indicates a sharp volatility contraction. The chart formation carries a slightly negative bias due to the establishment of lower highs. The downward-sloping border of the Descending Triangle pattern is plotted from December 28 high at 1.2827, while the horizontal support is placed from December 13 low near 1.2500. The pair has climbed above the 20-day and 50-day Exponential Moving Averages (EMAs), which are closely trading near 1.2630. Meanwhile, the 14-period Relative Strength Index (RSI) trades in the 40.00-60.00 region, indicating indecisiveness among market participants.
The Pound Sterling fails to continue its winning spell to a third trading session on Thursday. The GBP/USD pair falls significantly after kissing the round-level resistance of 1.2700. The overall trend remains sideways as the pair oscillates in the Descending Triangle pattern formed on the daily time frame. The aforementioned chart pattern indicates a sharp volatility contraction. The chart formation carries a slightly negative bias due to the establishment of lower highs. The downward-sloping border of the Descending Triangle pattern is plotted from December 28 high at 1.2827, while the horizontal support is placed from December 13 low near 1.2500. The pair has climbed above the 20-day and 50-day Exponential Moving Averages (EMAs), which are closely trading near 1.2630. Meanwhile, the 14-period Relative Strength Index (RSI) trades in the 40.00-60.00 region, indicating indecisiveness among market participants.