- GBP/USD corrects to near 1.3400 from its weekly high of 1.3467 posted on Thursday.
- The BoE left interest rates on hold at 3.75%, and traders are pricing in two 25 bps interest rate hikes during the year.
- Cable would extend upside if it manages a decisive break above 38.2% Fibo retracement at 1.3467.
The GBP/USD pair trades 0.2% lower to near 1.3400 during the late Asian trading session on Friday. The Cable faces selling pressure as the US Dollar Index (DXY) rebounds after an over-a-percent decline the previous day.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.28% | 0.21% | 0.44% | -0.05% | 0.00% | -0.12% | 0.14% | |
| EUR | -0.28% | -0.07% | 0.15% | -0.33% | -0.28% | -0.40% | -0.14% | |
| GBP | -0.21% | 0.07% | 0.23% | -0.26% | -0.20% | -0.33% | -0.07% | |
| JPY | -0.44% | -0.15% | -0.23% | -0.47% | -0.43% | -0.55% | -0.28% | |
| CAD | 0.05% | 0.33% | 0.26% | 0.47% | 0.04% | -0.07% | 0.19% | |
| AUD | -0.00% | 0.28% | 0.20% | 0.43% | -0.04% | -0.12% | 0.13% | |
| NZD | 0.12% | 0.40% | 0.33% | 0.55% | 0.07% | 0.12% | 0.26% | |
| CHF | -0.14% | 0.14% | 0.07% | 0.28% | -0.19% | -0.13% | -0.26% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
As of writing, the USD Index is up 0.3% to near 99.45 after recovering from the weekly low of around 99.00 posted on Thursday.
The US Dollar (USD) fell sharply after a string of global central banks signaled that interest rate cuts have gone out of the picture, citing upside inflation risks amid rising oil prices due to conflicts in the Middle East.
The Pound Sterling (GBP) gained sharply on Thursday after the Bank of England (BoE) held interest rates steady at 3.75%, with a clean majority. All BoE Monetary Policy Committee (MPC) members voted for an interest rate hold against estimates of 7-2.
Meanwhile, a Reuters report has shown that traders expect the BoE to deliver two 25 basis points (bps) interest rate hikes this year as inflationary pressures in the United Kingdom (UK) economy are unlikely to return to the 2% target anytime soon amid higher energy prices.
GBP/USD technical analysis
GBP/USD slumps to near 1.3405 in the Asian trade on Friday. The near-term bias turns mildly bullish as spot attempts to settle above the 20-day Exponential Moving Average, which flattens just above 1.3400. Price action continues to respect the broader downswing measured from the 1.3868 high, with the pair struggling to extend the advance above the 38.2% Fibonacci retracement at 1.3467.
The 14-day Relative Strength Index (RSI) shifts into the 40.00-60.00 band from the 20.00-40.00 zone, signaling that the bearish momentum has run its course for now; however, the bearish structure has not broken yet.
Initial resistance emerges near the 38.2% Fibonacci retracement at 1.3467, with a daily close above this level needed to open the way toward 1.3546 at the 50.0% retracement. On the downside, immediate support aligns with the 23.6% retracement at 1.3375, followed by the recent swing low near 1.3320, while a break below that area would expose the 1.3223 base and signal an extension of the prevailing decline.
