GBP/USD attracts some intraday buying on Monday, though lacks follow-through.A modest USD pullback from a two-decade high offers some support to the major.The fundamental/technical backdrop still seems tilted in favour of bearish traders.
The GBP/USD pair stages a modest bounce from its lowest level since March 2020, around the 1.1445 area touched earlier this Monday. Spot prices hit a fresh daily high during the mid-European session, albeit seeming to struggle to capitalize on the move or find acceptance above the 1.1500 psychological mark.
The US dollar trims a part of its early gains to a fresh two-decade high and turns out to be a key factor offering some support to the GBP/USD pair. That said, expectations that the Fed will stick to its aggressive policy tightening path act as a tailwind for the greenback. Apart from this, a bleak outlook for the UK economy continue to undermine the British pound and keep a lid on any meaningful gains for the major.
It is worth recalling that the Bank of England had warned last month that the UK economy will enter a prolonged recession during the last quarter of the year. Adding to this, the British Chambers of Commerce (BCC) downgraded its forecast and now expects the UK economy to record three consecutive quarters of contraction. This, to a larger extent, overshadows the prospects for further interest rate hikes by the UK central bank.
Nevertheless, the fundamental backdrop still supports prospects for an extension of a three-week-old downward trajectory. Even from a technical perspective, acceptance below the 1.1500 mark and the GBP/USD pair’s inability to attract any buyers suggests that the near-term selling bias is still far from being over. Hence, any attempted recovery move could be seen as a selling opportunity and runs the risk of fizzling out rather quickly.
EUR/USD extends sideways grind above 0.9900
EUR/USD has managed to erase a small portion of its daily losses but failed to gather recovery momentum amid the souring market mood and the dismal EU data. With trading action turning subdued in the second half of the day, the pair moves sideways above 0.9900.
GBP/USD holds near 1.1500 as trading volume thins out
GBP/USD has steadied above 1.1500 after having started the week on a weak footing. Liz Truss has won the Tory leadership race to become the next UK PM. Trading activity remains subdued with US markets remaining closed on the Labor Day holiday.
Gold temporarily on pause, but looking for lower lows
God sees little action at the start of a week amid a holiday in the US and a risk-averse environment. The bright metal currently changes hands at around $1,710.00 a troy ounce after bottoming at $1,688.71 last week.
Bitcoin dumps some more as bulls push for lower prices
Investors foreshadow another crypto crash with the upcoming major event – the Ethereum Merge. The market is conflicted, with some participants believing the Merge has already been factored in. In contrast, others augur a sell-the-news scenario with immense losses.