GBP/USD Retreats: Understanding the Factors at Play
GBP/USD underwent a technical correction, retracing to approximately 61.8% from the previous swing high before concluding Thursday's session in negative territory. The pair has continued its downward trend early into Friday.
Comments made by Federal Reserve (Fed) officials on Thursday contributed to a rebound in US Treasury bond yields and bolstered the US Dollar (USD). Atlanta Fed President Raphael Bostic acknowledged progress in inflation for April but emphasized that the Fed had not yet initiated policy easing. Similarly, Cleveland Fed President Loretta Mester remarked on the adequacy of current monetary policy, indicating a need to review additional data. Richmond Fed President Thomas Barkin echoed these sentiments, stating on CNBC that recent Consumer Price Index (CPI) data did not align with the Fed's objectives for inflation.
Meanwhile, the US Department of Labor reported 222,000 weekly Initial Jobless Claims for the week ending May 11, down from 232,000 the previous week.
From a technical standpoint, there is potential for a bearish correction in the GBP/USD price, targeting the lower end of the chart to address inefficiencies stemming from the preceding bullish rally. This area has been highlighted in the Footprint chart for reference.
Footprint chart
Comments made by Federal Reserve (Fed) officials on Thursday contributed to a rebound in US Treasury bond yields and bolstered the US Dollar (USD). Atlanta Fed President Raphael Bostic acknowledged progress in inflation for April but emphasized that the Fed had not yet initiated policy easing. Similarly, Cleveland Fed President Loretta Mester remarked on the adequacy of current monetary policy, indicating a need to review additional data. Richmond Fed President Thomas Barkin echoed these sentiments, stating on CNBC that recent Consumer Price Index (CPI) data did not align with the Fed's objectives for inflation.
Meanwhile, the US Department of Labor reported 222,000 weekly Initial Jobless Claims for the week ending May 11, down from 232,000 the previous week.
From a technical standpoint, there is potential for a bearish correction in the GBP/USD price, targeting the lower end of the chart to address inefficiencies stemming from the preceding bullish rally. This area has been highlighted in the Footprint chart for reference.
Footprint chart
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