Breaking News
Get 45% Off 0
Is it finally time to sell Nvidia ahead of earnings?
Read More

GBP/USD Stuck in Range: US Dollar Index Dynamics May Sway Cable's Path

By MarketPulse (Zain Vawda)CurrenciesNov 27, 2024 04:02AM ET
www.investing.com/analysis/gbpusd-stuck-in-range-us-dollar-index-dynamics-may-sway-cables-path-200654649
GBP/USD Stuck in Range: US Dollar Index Dynamics May Sway Cable's Path
By MarketPulse (Zain Vawda)   |  Nov 27, 2024 04:02AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
GBP/USD
-0.17%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DX
+0.15%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USDIDX
+0.17%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
  • GBP/USD is stuck in a tight range, reflecting market indecision.
  • Upcoming US data releases, including GDP and PCE data, could trigger a breakout from the range.
  • The US Dollar Index’s performance will heavily influence GBP/USD’s movements.

Cable has continued to consolidate in a 100 pip range this week with yesterday a prime example of the indecision at play. GBP/USD tested both the high and low of the range before finishing the day relatively flat.

US Data Ahead and Central Bank Meetings

There has been some respite for the GBP as the US dollar's impressive rally has also stalled this week. Despite this GBP/USD has failed to push on which could be a sign that bears may be holding the edge.

Given the lack of UK data this week, the US will be key with a slew of medium and high-impact data releases scheduled. The FOMC minutes were released yesterday, with more cuts expected but ‘gradually’. No surprise really given the potential implications that may arise from a Trump Presidency.

The December Fed meeting is around 60-40 in favor of a rate cut of 25 bps but the January meeting seems to be favoring a pause. The meeting will come 9 days after Donald Trump takes office and I would think a pause would be a prudent approach given Trump’s tariff rhetoric.

Fed Interest Rate Probabilities
Fed Interest Rate Probabilities

Source: LSEG

Looking across the pond and the Bank of England (BoE) are expected to pause in December. This could work in favor of the GBP in the short-term but moving forward into 2025 and the BoE are likely to cut more than the Fed at present. This of course could change as more data is released and the impact of Trump’s economic policy is felt.

A batch of US data awaits later in the day with initial jobless claims and the 2nd GDP estimate. We will also get the first glimpse of PCE data as well which may shed more light on the recent rise in US PPI and CPI data. The data could once again drive GBP/USD price action but as has been the case of late, any moves are unlikely to prove sustainable.

Economic Calendar
Economic Calendar

Technical Analysis

US Dollar Index (DXY)

The Dollar Index has been interesting to monitor of late and has been a driving force for dollar-denominated pairs.

The DXY is trading below the multi-month key level at 107.00 which it has done on Monday and Tuesday this week. However, the index has failed to close below this level which has been key to keeping bulls interested.

The daily candle close today will be key with a close below this level likely to lead to further downside. It is key to monitor the US data as this could be key to where the DXY ends the day.

US Dollar Index (DXY) Daily Chart, November 27, 2024
US Dollar Index-Daily Chart
US Dollar Index-Daily Chart

Source:TradingView.com

GBP/USD

From a technical standpoint, GBP/USD has been stuck in a 100-pip range for the last four days. Price is making a move to the upside at the moment but acceptance above the range high at 1.2618 is needed for further upside to materialize.

A move above this key level opens up a test of resistance at 1.2681 and 1.2750. Looking further and we have the 200-day MA at 1.2819.

A rejection and a move lower from these levels faces support at the 1.2500 psychological level with a break of this level leading to a run toward the 1.2440 and 1.2312 handles respectively.

GBP/USD Daily Chart, November 27, 2024
GBP/USD-Daily Chart
GBP/USD-Daily Chart

Source:TradingView.com

Support

  • 1.2500
  • 1.2440
  • 1.2312

Resistance

  • 1.2618
  • 1.2681
  • 1.2750

Original Post

GBP/USD Stuck in Range: US Dollar Index Dynamics May Sway Cable's Path
 

Related Articles

GBP/USD Stuck in Range: US Dollar Index Dynamics May Sway Cable's Path

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Apple
Continue with Google
or
Sign up with Email