GBP/USD Gains Momentum, Approaches Key Resistance at 1.2250
GBP/USD continued its upward move towards 1.2250 early on Friday, with 1.2290 emerging as the next crucial resistance level. Market sentiment remains a key driver ahead of the weekend.
During the Asian session, GBP/USD hovered around 1.2200, consolidating its gains from Thursday's recovery. However, in early European trading, the pair regained momentum and approached 1.2250.
The recent weakness of the US Dollar (USD) across the board supported GBP/USD's recovery during the latter half of the week. As Wall Street indices turned positive after an initially flat opening, the USD lost its appeal as a safe-haven asset, further bolstering GBP/USD.
Early on Friday, the market displayed optimism, with the UK's FTSE 100 Index gaining over 0.3%. Additionally, US stock index futures traded positively following a subdued Asian session.
Later in the day, the US will release the
Personal Consumption Expenditures (PCE) Price Index data. The Core PCE Price
Index, a key inflation gauge for the Federal Reserve, is expected to show a
3.9% increase in August, slightly softer than the 4.2% recorded in July. A
below-forecast figure could temporarily weaken the USD, but the overall
direction of the currency is more likely to be influenced by upcoming September
Consumer Price Index (CPI) data and next week's September jobs report, which
will shape the Fed's rate outlook.
Meanwhile, market participants are closely monitoring US political developments
as Republicans and Democrats remain divided on a budget deal to avert a
government shutdown by the October 1 deadline. If safe-haven demand returns, it
could strengthen the USD and hinder GBP/USD's upward momentum.
GBP/USD found support as the dollar corrected. The 1.2290 level is the next resistance level but it's more for a continuation down than a sustainable correction as the pound doesn’t seem to have any fundamentals to support it for longer.
|
Resistance 3 |
Resistance 2 |
Resistance 1 |
Support 1 |
Support 2 |
Support 3 |
|
1.2500 |
1.2400 |
1.2290 |
1.2110 |
1.2000 |
1.1900 |