GBP/USD Price Analysis: Bulls turn cautious amid overbought RSI, downside potential seems circumscribed
GBP/USD is trading with a mildly negative bias in the Asian session on Thursday, although it lacks follow-on selling and remains within striking distance of the yearly high reached the previous day. Spot prices are currently hovering around the psychological 1.3000 level and look set to extend the recent uptrend seen over the past three weeks.
A modest rise in US Treasury yields is helping the US dollar (USD) recoup some of the previous day’s weighty losses to a near four-month low, which in turn is seen as a headwind for the GBP/USD pair. Still, growing acceptance that the Federal Reserve (Fed) will begin a rate-cutting cycle in September, along with a powerful bullish tone in global stock markets, could limit gains for the safe-haven Greenback. Read more…
GBP/USD reclaims 1.30 as markets tilt further towards interest rate cut hopes
GBP/USD edged closer to novel highs, testing chart territory north of the 1.3000 handle on Wednesday. Broad market hopes for a Federal Reserve (Fed) rate cut in September left the Greenback undervalued and gave the British Pound (GBP) an advantage in the midweek market session. Fedspeak’s latest statement was interpreted as decidedly dovish, with market participants seeing the writing on the wall they want to see as Fed officials gave the nod to recent progress on inflation measures. Cable traders will also want to pay attention to any volatility implications from the European Central Bank’s (ECB) interest rate call on Thursday.
Interest rate markets have fully priced in a rate cut of at least a quarter point when the Federal Open Market Committee (FOMC) meets for its rate call on September 18, and the July meeting later this month is still expected to keep rates unchanged. According to CME’s FedWatch Tool, a 98% chance of a September rate cut is fully priced in, with interest rate traders expecting three cuts in 2024 compared with the Fed’s modest forecast of one or two. Read more…
