GBP/USD posts modest gains above 1.2700, investors await US GDP data

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  • GBP/USD clings to mild gains near 1.2717 amid the USD softness. 
  • The UK Flash Purchasing Managers Index (PMI) for January came in stronger than expected. 
  • Former Fed’s Bullard said the central bank may begin cutting interest rates potentially as soon as March.
  • The flash US Gross Domestic Product (GDP) for Q4 will be in the spotlight on Thursday. 

The GBP/USD pair posts modest gains during the early Asian trading hours on Thursday. The major pair reclaims above the 1.2700 mark on the back of the risk-on sentiment. Nonetheless, the release of the preliminary US GDP growth numbers for the fourth quarter (Q4) on Thursday might trigger volatility in the market. At press time, GBP/USD is trading at 1.2717, up 0.01% on the day.

On Wednesday, the UK Flash Purchasing Managers Index (PMI) for January came in stronger than expected, with Manufacturing PMI growing from 46.2 to 47.3 while the Services PMI climbed from 53.4 to 53.8. Finally, the S&P Global Composite PMI rose from 52.1 to 52.5, the highest in seven months. 

Investors anticipate the Bank of England (BoE) will begin its rate-cutting cycle at its August meeting. The markets have priced in rate cuts by 175 basis points (bps) through the cycle, reaching 4.50% by December 2024. 

On the other hand, former St. Louis Federal Reserve (Fed) President James Bullard said on Tuesday that the central bank may begin cutting interest rates potentially as soon as March, even if inflation has not hit the 2% target. 

Nonetheless, the US key events this week might convince the Fed about the further monetary policy path. The flash US Gross Domestic Product (GDP) for Q4 will be released later on Thursday. The GDP annualized figure for Q4 is forecast to expand by 2.0% from 4.9% in the previous reading.

Additionally, the US Core Personal Consumption Expenditures Price Index (Core PCE) for December will be due on Friday. The monthly and annual Core PCE figures are expected to show an increase of 0.2% MoM and 3.0% YoY. The figures could give a clear direction to the GBP/USD pair. 

 

GBP/USD

Overview
Today last price 1.2718
Today Daily Change 0.0002
Today Daily Change % 0.02
Today daily open 1.2716
 
Trends
Daily SMA20 1.2707
Daily SMA50 1.2656
Daily SMA100 1.2457
Daily SMA200 1.2556
 
Levels
Previous Daily High 1.2775
Previous Daily Low 1.268
Previous Weekly High 1.2766
Previous Weekly Low 1.2597
Previous Monthly High 1.2828
Previous Monthly Low 1.2501
Daily Fibonacci 38.2% 1.2739
Daily Fibonacci 61.8% 1.2716
Daily Pivot Point S1 1.2673
Daily Pivot Point S2 1.2629
Daily Pivot Point S3 1.2578
Daily Pivot Point R1 1.2768
Daily Pivot Point R2 1.2819
Daily Pivot Point R3 1.2863

 

 

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