GBP/USD Price Fails to Recover Above 1.32 as USD Firms, Risk-off
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- GBP/USD price failed to mark its rebound above 1.3200 handle and fell back towards the 1.3180 area.
- The US dollar gains on the day as the risk sentiment deteriorate again.
- Technically, the pair seems poised to test the 1.3100
- US CPI, Fed policy, and BoE are the key events to watch.
The GBP/USD price made a failed attempt to rebound from its fresh eleven-month low of 1.3160 on Wednesday and has been trading again under 1.3200 high so far. The UK RICS house price balance was unchanged at 71.0 percent in November. By consensus, analysts had expected an increase to 72.0 percent.
The US dollar rose slightly in European trading on Thursday morning on a broad basis (as measured by the US dollar index).
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Attention continues to be paid to the persistently high inflation and the possible reaction of the central banks to it. The focus is on the US consumer prices in November, published on Friday before the Federal Reserve Bank (Fed) will announce its monetary policy decisions on Wednesday. It is generally expected that the Fed will accelerate the tapering of its asset purchase program and end it earlier than previously planned for mid-2022.
According to a recent survey by the Reuters news agency, analysts expect the Fed to raise its key interest rate for the first time in the third quarter of 2022. Moreover, most respondents added that there is a risk of an even earlier rate hike.
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The ECB and the Bank of England will announce their monetary policy decisions on Thursday next week.
GBP/USD price technical analysis: Sellers dominating the market
The GBP/USD price is heading towards the lowest end of the recent range below 20-period SMA on the 4-hour chart. The recent swing low has been the multi-month low for the pair. The pair is expected to test the 1.3100 handle as the sellers dominate the market.
The average daily range for the pair lies at 44% just ahead of New York session which is quite normal for the pair. We can expect the activity to be normal. Secondly, the volume data is more bearish biased.
