empty
09.12.2024 03:41 AM
Overview of the GBP/USD Pair for December 9; British Lull and U.S. Inflation

This image is no longer relevant

The GBP/USD pair continued to rise on Friday, contrasting with EUR/USD, which remained stagnant. Once again, the pound sterling exhibits greater resilience than the euro under nearly identical fundamental and macroeconomic conditions. This pattern has been consistent throughout 2024, with the pound rising more readily and falling less dramatically than the euro. While this resilience is impressive, it does not negate the pound's eventual need to decline further.

On Friday, U.S. labor market data were the primary market driver. Traders eagerly awaited the NonFarm Payrolls (NFP) and unemployment rate reports. Once published, the market initially struggled to interpret them. NFP data exceeded expectations for November and October, which was positive for the dollar. However, the unemployment rate increased to 4.2%, worse than the forecasted stability. Consequently, the dollar neither appreciated nor depreciated significantly, leaving the market unchanged by day's end.

The upcoming week in the UK offers little in the way of significant events. The first and only reports of note will be published on Friday, and even these are relatively minor. The GDP report will only cover monthly data, not quarterly. This report will likely reinforce the view that the British economy remains weak and needs support through Bank of England rate cuts. However, such cuts would further weaken the pound. Industrial production data is also unlikely to draw much attention.

In contrast, the U.S. has a more eventful week ahead. The most critical release is Wednesday's inflation report. Given its timing before the Federal Reserve's final meeting of the year, this data could have significant implications. Though the market remains skeptical, Jerome Powell and several colleagues have hinted at the possibility of a December pause. Labor market reports indicate stability, suggesting no need to ease monetary policy. If inflation accelerates to 2.7%-2.8% in November, as forecasted, it would provide a strong argument against cutting rates at the December meeting. This scenario would give the dollar a new boost against its competitors.

Even with just one major U.S. report, the week could be more impactful than the last. Technically, the pound continues its upward correction, aligning with expectations. The market appears to be gathering momentum for the next leg of the downtrend.

This image is no longer relevant

The average volatility of GBP/USD over the past five trading days is 85 pips, categorized as "average." For Monday, December 9, we expect the pair to trade within the range of 1.2655 to 1.2825. The higher linear regression channel is directed downwards, which signals a downtrend. The CCI indicator has displayed multiple bullish divergences and entered oversold territory several times. While the correction is underway, its strength remains uncertain.

Trading Recommendations:

The GBP/USD pair maintains a downward trend within a corrective phase. We do not currently recommend long positions, as we believe the market has already priced in the factors supporting the pound's growth multiple times. If you trade on the "pure" technique, long positions may be considered only if the price remains above the moving average, with targets at 1.2817 and 1.2835. Short positions remain more relevant, targeting 1.2573, especially if the price consolidates below the moving average.

Explanation of Illustrations:

Linear Regression Channels help determine the current trend. If both channels are aligned, it indicates a strong trend.

Moving Average Line (settings: 20,0, smoothed) defines the short-term trend and guides the trading direction.

Murray Levels act as target levels for movements and corrections.

Volatility Levels (red lines) represent the likely price range for the pair over the next 24 hours based on current volatility readings.

CCI Indicator: If it enters the oversold region (below -250) or overbought region (above +250), it signals an impending trend reversal in the opposite direction.

Paolo Greco,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

Fresh news on gas market situation

The gas market is experiencing significant and steady growth, which is not surprising given recent events. According to recent reports, after the outgoing Biden administration introduced several sanctions against Gazprom

Miroslaw Bawulski 13:37 2025-01-17 UTC+2

USD/JPY: Analysis and Forecast

The Japanese yen is declining, giving up part of its strong weekly gains against the US dollar. The ceasefire agreement between Israel and Hamas, along with a positive sentiment

Irina Yanina 11:35 2025-01-17 UTC+2

EUR/JPY: Analysis and Forecast

Today, the EUR/JPY pair is attempting to attract buyers, trading slightly above the psychological level of 160.00. However, this rise lacks bullish conviction due to divergent monetary policy outlooks between

Irina Yanina 11:32 2025-01-17 UTC+2

Bitcoin Kicks Off the Party

Bitcoin looks poised for a celebratory rally ahead of Donald Trump's inauguration, as the president-elect has pledged to make America the global hub for cryptocurrency. Insider reports from Bloomberg indicate

Marek Petkovich 08:20 2025-01-17 UTC+2

What to Pay Attention to on January 17? A Breakdown of Fundamental Events for Beginners

Numerous macroeconomic events are scheduled for Friday, but none are particularly significant. Currently, both currency pairs are experiencing relatively high volatility, indicating that the macroeconomic backdrop is not the main

Paolo Greco 06:51 2025-01-17 UTC+2

Overview of the GBP/USD Pair on January 17: Sterling's Brief Rise. Inflation Offered No Help

The GBP/USD currency pair continued its decline on Thursday. Similar to the euro, the downward trend effectively began on Wednesday evening and persisted through Thursday. However, unlike the euro

Paolo Greco 05:38 2025-01-17 UTC+2

Overview of the EUR/USD Pair on January 17: Another Corrective Phase Completed, Heading Toward Parity

The EUR/USD currency pair resumed its downward trend on Thursday, breaking below the moving average line once again. The decline actually began on Wednesday evening. It's worth noting that after

Paolo Greco 05:38 2025-01-17 UTC+2

EUR/USD: Trapped in a Sideways Trend

The pair remains range-bound, moving in a confined price corridor. Buyers are struggling to establish a firm position at the 1.03 level, while sellers are unable to drive the pair

Irina Manzenko 23:46 2025-01-16 UTC+2

EUR proves its malaise

Wishing for success but held back by weaknesses—a slowdown in core US inflation in December to 0.2% MoM triggered a massive risk rally. Stocks posted their strongest performance since

Marek Petkovich 14:15 2025-01-16 UTC+2

USD/CAD: The Pair Finds Support from Multiple Factors

The USD/CAD pair is showing positive momentum today, rebounding from the 1.4300 level—a level near the weekly low—and continuing its intraday upward movement during the first half of the European

Irina Yanina 12:40 2025-01-16 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.