GBP/USD Cable Attempts Recovery with Key Levels for Downside Potential


The GBP/USD analysis indicates that the economic calendar is relatively quiet, but there are central bank speakers scheduled to speak. Despite testing the prior zone of support, GBP/USD has managed to regain some lost ground, following a momentary drop below the 200 SMA. The Bank of England’s lone dove, Swati Dhingra, recently voted for a cut in the January meeting, indicating some uncertainty in the market.

While the economic calendar remains subdued, Fed officials continue to provide their input on the US economy. The positive signs shown in inflation and the challenges in reaching the 2% marker from current levels may affect future interest rate cuts. This is in contrast to the UK’s economic performance, which lags behind the US, delaying the anticipated start of rate cuts in the US. In addition, the US labor market is growing, despite news of retrenchments, and services PMI data indicates a significant improvement, lifting sentiment further.

Overall, the GBP/USD continues to consolidate within familiar territory, with key levels for a bearish continuation identified. Resistance appears at the December swing high of 1.2736, followed by channel resistance at 1.2800. Additionally, the market expectations and derived probabilities play a crucial role in shaping the future direction of the GBP/USD exchange rate.

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