- On Wednesday, GBP/USD definitely returned above 1.2600.
- Cable is now poised for a fresh test at 1.2700, but data remains meager.
- A series of widely anticipated data from the US paves the way for the holiday in the US market.
GBP/USD finally broke above 1.2600 on Wednesday, driven higher by broad market weakness amid the dollar’s recent bullish stance. Economic data on the UK side of the calendar remains modest, and after Wednesday’s broad US data print, which came broadly in line with expectations, markets will be serene for the rest of the week.
On Thursday and Friday, investors will feel a clear reduction in market flows: on Thursday, US markets will be completely closed due to the Thanksgiving holiday in the US, and Friday will also be radiant and most US stock exchanges will shorten their opening hours. Next week’s UK data set will be equally meager, with investors focusing on the next round of US nonfarm payrolls data next Friday, with plenty of preliminary employment data to cloud that view.
Annualized gross domestic product (GDP) in the U.S. grew by an expected 2.8% in the third quarter, which surprised no one and barely moved the needle in response to investor impulses. The core personal consumption expenditure price index (PCEPI) accelerated to 2.8% in the year ended October, also meeting expectations. While rising inflation rates generally bode poorly for market expectations of future interest rate cuts, an upward move was widely expected, and maintaining monthly figures at 0.3% m/m helped put the rising figures in the rearview mirror.
GBP/USD price forecast
Wednesday’s Cable bounce sees the pair start a fresh streak near 1.2700, adding almost a full percentage of intraday trading and setting up GBP/USD bulls for a fresh leg back to the top after a 7% top-to-bottom decline bottom from September highs at 1.3434. However, long positioning will face fresh challenges with the 200-day exponential moving average (EMA) near 1.2835.
