GBPUSD UPDATE : GBPUSD pares intraday losses below 1.3200 on cautious optimism, yields, Ukraine eyed
- GBP/USD rebounds from intraday low while consolidating weekly losses.
- UK Chancellor Sunak hints at responsible approach to public finances, Brexit has a long way to go.
- US Treasury yields retreat from multi-month high, stock futures, FTSE print mild gains.
- Headlines from Russia, Ukraine have been positive of late, Fedspeak propels bond rout.
GBPUSD UPDATE : GBP/USD pick-up bids to consolidate daily losses around 1.3165 during the second negative day amid Tuesday’s European session.
The cable pair’s latest rebound could be linked to the retreat in the US Treasury yields, as well as comments from UK Chancellor Rishi Sunak.
UK’s Sunak said, “Ongoing uncertainty caused by global shocks means it’s more important than ever to take a responsible approach to public finances.”
On the other hand, the US 10-year Treasury yields and the 2-year counterpart both rose to a fresh high since May 2019 during the Asian session before recently easing to 2.32% and 2.16% in that order.
Also challenging the GBP/USD bears are the market’s recent optimism due to the news from Ukraine and Russia, which in turn favor Euro Stoxx 50 Futures and FTSE 100 to print mild gains and also push the US Dollar Index (DXY) to step back from the daily top.
Among them were the comments from Ukraine President Volodymyr Zelenskyy who showed readiness to discuss commitment from Ukraine not to seek NATO membership. Additionally, Russia’s ability to pay the second installment of Eurobond coupons favors the market sentiment and supports the GBP/USD rebound.
GBPUSD UPDATE : On the contrary, comments from the UK’s Lords sub-committee on the Brexit protocol challenge the recovery moves. “The UK and EU need to do more to explain how updates to EU law could impact Northern Ireland, a House of Lords committee has warned,” said the BBC. Furthermore, money markets’ bets favoring a 0.50% rate hike by the Fed in May and 190 basis points (bps) of interest rate lifts by the end of 2022 also challenge the GBP/USD pair’s upside momentum.
That said, the quote’s rebound eyes Fedspeak and developments surrounding the Ukraine-Russia peace talks for fresh impulse ahead of Wednesday’s UK Consumer Price Index (CPI) and Thursday’s busy calendar including PMIs and US Durable Goods Orders.
Technical analysis
GBP/USD bears need to conquer an ascending trend line from the last Tuesday, around 1.3145, to keep the reins. Also testing the downside move is the 50-SMA level of 1.3108. On the contrary, the 100-SMA and a 12-day-old horizontal resistance area surrounding 1.3190-3200 restrict the short-term upside of the cable pair.
Confuse Which Broker is best ? , Here you can find the best regulated broker