ST-37 City, Mwali, Fomboni Moheli Comoros Union.
ST-37 City, Mwali, Fomboni Moheli Comoros Union.
Apr 04
2024
GBP/USD is trading above 1.2650 early Thursday, finding support from a broadly subdued US Dollar. Mixed US data, dovish Fed commentary and an upbeat market mood continue to act as a headwind to the US Dollar ahead of more statistics and Fedspeak.
The 50-day SMA, the Fibonacci 38.2% retracement of the latest downtrend and the 200-period SMA on the 4-hour chart form immediate resistance at 1.2670-1.2680. In case GBP/USD rises above that level and starts using it as support, 1.2710 (Fibonacci 50% retracement) and 1.2750 (Fibonacci 61.8% retracement) could be seen as next resistance levels.
On the downside, the 100-day SMA aligns as first support at 1.2660. If GBP/USD drops below that level, technical sellers could take action. In this scenario, 1.2620 (Fibonacci 23.6% retracement) could be seen as next support before 1.2590 (200-day SMA).
GBP/USD registered strong daily gains on Wednesday and continued to stretch higher early Thursday. The pair stays in positive territory above 1.2650 in the European session and the technical outlook points to a bullish tilt in the near term.
The broad-based selling pressure surrounding the US Dollar (USD) provided a boost to GBP/USD midweek. Once the pair climbed above the 200-day Simple Moving Average (SMA) at 1.2590, technical buyers took action, allowing the pair to extend its rally.
Meanwhile, the data from the US showed that the economic activity in the service sector expanded at a softening pace in March, with the ISM Services PMI declining to 51.4 from 52.6 in February. Moreover, the Prices Paid Index fell to 53.4 from 58.6 in the same period, showing a pullback in the sector's input inflation.
At the time of press, US stock index futures were up between 0.3% and 0.45% on the day. In case risk flows dominate the action in the second half of the day, the USD could have a hard time finding demand.
The US economic calendar will offer weekly Initial Jobless Claims data. Ahead of Friday's Nonfarm Payroll (NFP) report for March, however, investors could refrain from taking large positions based on this data alone.