- Greenback extends losses on Friday, as equity prices continue to rally.
- US dollar hit by risk appetite and Fed rate cut expectations.
The GBP/USD pair rose further during the American session and printed a fresh daily high at 1.2568, slightly below the weekly top. The pair is near the 1.2570 resistance zone, consolidating weekly gains.
The move higher is being supported by a decline of the US Dollar across the board. The DXY is down 0.20%, below 97.00 and looking at weekly lows. Also, commodity and emerging market currencies are posting strong gains versus USD. In Wall Street, the DOW JONES is up 0.58% and the NASDAQ 0.45%.
Cable is consolidating weekly gains and a significant rebound from multi-month lows. It is still seen under pressure on long term charts and from a fundamental perspective by UK and Brexit uncertainty. Over the last few days, US Dollar weakness was a key driver. On Friday, not even higher-than-expected PPI numbers helped the dollar.
Levels to watch
“Initial resistance awaits at 1.2560 which was a swing low in May. Further up, 1.2605 was a low point in May and later capped GBP/USD in mid-June. It is followed by 1.2660 which provided support twice in June, and 1.2780 which was the high point in June”, explained Yohay Elam analyst at FXStreet.
According to him, support awaits at 1.2505 (June’s low). “Next, we find 1.2480 which was a trough in early July. Critical support awaits at 1.2439 which was the flash crash low in January and also the low point in July – a double bottom. 1.2360 is the next level to watch and it dates back to April 2017.”