Thursday, December 08, 2022

GBP/USD fails to gain traction, remains defensive around 1.1500 level

GBP/USD fails to gain traction, remains defensive around 1.1500 level

  • GBP/USD has failed to take advantage of the previous day’s bounce from its lowest level since 1985.
  • The gloomy economic outlook for the UK is acting as a headwind for the British pound.
  • The weak price action of the dollar neither affects the bulls nor gives them any support.

couple GBP/USD It is struggling to take advantage of the previous day’s bounce from the 1.1400 area, the lowest level since 1985, and range-bound on Thursday. The pair is trading around the 1.1500 level at the start of the European session and it looks like Unprotected to prolong bearish move lasting almost a month,

Proposed £30bn tax cut and capping energy bills Number of houses by the new British Prime Minister Liz Truss, UK debt market raises concerns, In addition, Bank of England policymakers, who testified before Parliament’s Treasury Committee on Wednesday, He didn’t strengthen the stakes for a more aggressive rate hike, This is seen as a major factor that continues to weigh on the British Pound and acts as a headwind for the GBP/USD pair.

Meanwhile, the US dollar appears to be consolidating the previous day’s sharp decline from a two-decade high. Signs of stability in financial markets seem to be weighing on the safe-haven dollar, although they do not affect the bulls nor give a significant boost to the GBP/USD pair. Too, Hopes the Fed will continue to tighten its monetary policy to curb inflation, lending some support to the dollar,

mentioned fundamental factors, together with The deteriorating outlook for the UK economy, suggesting that the path of least resistance for GBP/USD is on a downside. Therefore, any rally attempt can be viewed as a selling opportunity and the risk is rapidly fading. Market participants are now awaiting Fed Chairman Jerome Powell’s speech, which could have an impact on the dollar later in the US session.

Traders will continue to watch the European Central Bank’s expected decision to see some cross movement around the Pound Sterling. Meanwhile, the GBP/USD pair is likely to continue its weak, range-bound price action amid the absence of a market-relevant economic release.

GBP/USD Technical Level

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