GBP/USD is back above the 1.2100 figure, courtesy of the US Dollar weakness.
China’s relaxing Covid-19 restrictions keep sentiment positive.GBP/USD> Testing the 20 and 200-DMAs, on its way toward 1.2200.
The Pound Sterling advances sharply following a European choppy trading session, bouncing off the day’s lows around 1.2000, posing a challenge to the 1.2100 figure in the New York session. At the time of writing, the GBP/USD is trading at 1.2108.
Improvement in sentiment weighs on the USD.Investors’ mood is mixed amidst the North American session. The lack of US economic data, with the US Redbook released around 13:55 GMT, coming at 9.6% YoY, compared to the previous reading of 7.6%, failed to underpin the US Dollar (USD). Later at 15:00 GMT, US Pending Home Sales for November and the Richmond Fed Indices are expected to improve slightly compared to its previous readings.
Another factor that improved traders’ sentiment is that China is removing Covid-19 restrictions on visitors while beginning to issue travel permits to Hong kong residents. Additionally, authorities started to issue passports and would officially reopen its borders on January 8. Even though the mood shifted positively, fears that inflationary pressures would rise keep traders wary.
In the meantime, the US Dollar Index (DXY), a gauge of the buck’s value against a basket of peers, losses 0.28%, down at 103.984, undermined by falling US Treasury bond yields.
Ahead into the week, the UK economic docket is empty, while the US calendar will feature Initial Jobless Claims for the week ending on December 23, ahead of the release of the Chicago PMI on Friday.
GBP/USD Price Analysis: Technical outlook
From the daily chart perspective, the GBP/USD is testing the 20 and 200-day Exponential Moving Average (EMA) at 1.2113 after bouncing from weekly lows around 1.2000. If the former is cleared, the nest resistance would be an upslope trendline previous support-shifted- resistance around 1.2180, followed by the 1.2200 figure. On the flip side, failure to stay above 1.2100 could pave the way toward weekly lows at 1.2000 and the 50-day EMA at 1.1935.
EUR/USD holds steady at around 1.0650 after US data
EUR/USD edged lower and returned to the 1.0650 area after having spiked above 1.0670 in the early American session. The data from the US showed that Pending Home Sales declined by 4% in November, making it difficult for the US Dollar to gather strength.
GBP/USD extends recovery beyond 1.2100
GBP/USD has gathered recovery momentum in the second half of the day on Wednesday and climbed above 1.2100. In addition to the improving market mood, the weaker-than-expected housing data from the US weighed on the US Dollar and helped the pair push higher.
Gold manages to hold above $1,800 on choppy day
Gold price managed to recover modestly after having retreated toward $1,800 earlier in the day but struggled to gather momentum. With the benchmark 10-year US Treasury bond yield staying quiet slightly above 3.8%, XAU/USD is having a tough time finding direction.