TODAY GBPUSD UPDATE : GBPUSD defends 1.2600 at monthly high on USD’s retreat, Biden-Powell meeting in focus


TODAY GBPUSD UPDATE : GBPUSD defends 1.2600 at monthly high on USD’s retreat, Biden-Powell meeting in focus

  • GBP/USD pares the first daily loss in five around one-month high.
  • Cautious sentiment ahead of the key data/events probe US dollar bulls.
  • Biden hints at three-step plan to tame inflation, suggests reducing the federal deficit.
  • Challenges for UK PM Johnson, BOE’s Bailey and Brexit woes test buyers.

TODAY GBPUSD UPDATE : GBP/USD struggles to overcome intraday losses around the monthly top heading into Tuesday’s London open. In doing so, the cable traders fade bounce off 1.2598 around 1.2615 by the press time.

The pair’s latest struggle could be linked to the traders’ anxious mood ahead of the meeting between US President Joe Biden and Fed Chair Jerome Powell. Also challenging the GBP/USD traders are mixed concerns over Brexit, UK PM Johnson’s hardships on the ‘partygate’ issue, as well as criticism of the Bank of England’s (BOE) late response to the inflation rally.

That said, the US Dollar Index (DXY) struggles to extend the recovery from the monthly low to around 101.70 as yields dwindle by the end of the first negative month in six. It’s worth noting that the bond yields dropped the most in six months during May as market players trim bets on the Fed’s aggressive rate hikes after recently downbeat US inflation and growth numbers.

TODAY GBPUSD UPDATE : Geopolitical fears emanating from the showdown over the Northern Ireland Protocol (NIP), ire over UK PM Boris Johnson’s moves during covid-led lockdowns and US President Joe Biden’s push for balance sheet reduction also probe the GBP/USD traders of late.

Against this backdrop, the US 10-year Treasury yields rise almost 10 pips from Friday’s New York session close to 2.84% whereas the S&P 500 Futures print mild gains around 4,165 at the latest.

To sum up, mixed concerns and a cautious mood may weigh GBP/USD prices ahead of the key Biden-Powell meeting. Should the policymakers renew fears of faster Fed rate hikes, the latest pullback of the pair can extend.

The clear downside break of a 12-day-old support line, now resistance around 1.2630, keeps GBP/USD sellers hopeful to revisit the mid-May peak surrounding 1.2500. On the flip side, the 50-day EMA level surrounding 1.2720 restricts immediate upside.

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