GBP/USD Price Struggling Above 1.30, Eying Fed, BoE
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- The GBP/USD pair recovered slightly from its lowest level since November 2020, 1.3000.
- An uptick in UK employment data and dollar-denominated sale activity support the positive trend.
- Before FOMC/BoE meetings, bulls stayed away from aggressive bets due to the Ukraine crisis.
The GBP/USD price is trading near the daily highs just below the mid-1.3000 during the European session.
On Tuesday, the pair showed some resilience and attracted buyers around 1.3000, ending a three-day losing streak to its lowest level since November 2020. An increase in the pound was supported by some US dollar weakness and better than expected jobs data in the UK.
UK Office for National Statistics (ONS) reported that the unemployment rate fell to 3.9% in January, while it had been expected to drop to 4.0% from 4.1% the month before. Additionally, the number of people applying for unemployment benefits fell by 48.1 thousand in February, compared to -31.9 thousand previously.
Data from the Bank of England confirmed market expectations that interest rates will be raised at its meeting on Thursday, boosting the British pound. However, while market sentiment remained volatile amid the possibility of further escalation in the Russia-Ukraine conflict, the GBP/USD pair lacked optimism.
Besides geopolitical risks, the recent rise in US Treasury yields and growing recognition of the Fed’s tightening cycle should boost the dollar. Consequently, aggressive uptrend traders must be cautious before positioning further growth in the GBP/USD pair.
Aside from investing in central bank events, some investors may prefer to stay on the sidelines. Following the Fed’s two-day policy meeting on Wednesday, the Bank of England will announce its decision on Thursday. It will determine the next phase of the GBP/USD pair’s directional movement.
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GBP/USD price technical analysis: Downside protected by 1.3000
The GBP/USD found a double bottom at the 1.3000 psychological mark. The pair is trying to gain some momentum. However, the upside remains shallow and may not post some meaningful recovery. The pair needs a strong bullish reversal signal to trigger a rally.
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The volume data remains bearish bias at the moment. However, the bears will find it hard to break the 1.3000 mark. If it happens, we may see a plummet towards the 1.2850 area. On the upside, 1.3080 remains a key resistance for the bulls to overcome.
