GBPUSD has halted its decline as the US Dollar experiences a temporary retracement.

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• GBP/USD snaps the losses due to a pullback in the Greenback.

The pair currently trades last at 1.24836.

The previous day high was 1.2509 while the previous day low was 1.2446. The daily 38.2% Fib levels comes at 1.247, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2485, expected to provide resistance.

GBP/USD breaks the three-day losing streak, trading higher around 1.2490 during the Asian session on Friday. The pair is currently finding support as a result of a correction in the US Dollar (USD) following a three-day winning streak. This correction can be attributed to the pullback in US Treasury yields, with the 10-year US Treasury bond yields dropping to 4.22%, marking a 1.36% decrease since the previous day.

Employment data released on Thursday from the United States (US) revealed that as of September 1, US Initial Jobless Claims stood at 216K, indicating a decrease from the previous figure of 229K. This figure was better than the expected increase of 234K. Furthermore, in the second quarter (Q2), US Unit Labor Costs rose to 2.2%, up from the previous 1.6%, which was contrary to expectations of it remaining consistent.

However, the US Dollar (USD) continues to derive strength from the ongoing series of positive economic data regarding the state of the US economy. US Dollar Index (DXY), which gauges the Greenback’s performance against six other major currencies, is currently trading around 104.90, albeit below its highest level marked on Thursday since April.

US Federal Reserve (Fed) is poised to sustain elevated interest rates over an extended timeframe. Furthermore, there is an expectation that the Fed will enact a 25 basis point (bps) interest rate hike during its November and December meetings. This hawkish stance is providing substantial support for bolstering the US Dollar (USD).

On the other side, the belief that the Bank of England (BoE) is approaching the conclusion of its policy tightening phase might exert downward pressure on the Pound Sterling (GBP) and limit the upside potential of the GBP/USD pair.

However, BoE Governor Andrew Bailey conveyed to lawmakers on Wednesday that the central bank is nearing the conclusion of its series of interest rate hikes. However, he cautioned that borrowing costs could still see additional increases due to persistent high inflation.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.2496 at the time of writing. Pair opened at 1.2472 and is trading with a change of 0.19 % .

The pair is trading below its 20 Daily moving average @ 1.2655, below its 50 Daily moving average @ 1.2766 , below its 100 Daily moving average @ 1.2655 and above its 200 Daily moving average @ 1.2426

The previous day high was 1.2509 while the previous day low was 1.2446. The daily 38.2% Fib levels comes at 1.247, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2485, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.2442, 1.2413, 1.2379
• Pivot resistance is noted at 1.2505, 1.2539, 1.2568

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