Durable Goods Orders underperformed in November as US PCE inflation declined as expected. GBP/USD is having trouble holding onto the 1.2000 level as demand for US Dollars rises. Demand for US dollars rises in anticipation of the holiday weekend.
GBP/USD pared losses and teetered on day highs after a brief decline to 1.2022, a new daily low. It trades in the 1.2040 price range as speculative interest continues to process mixed macroeconomic data from the United States. On the other hand, the Personal Consumption Expenditures (PCE) Price Index shows lower inflationary pressures in the nation, which increased 5.5% YoY in November from 6.1% in October.
On the other hand, surprisingly worse than the 0.6% decrease that market participants had predicted, Durable Goods Orders fell by a staggering 2.1% MoM in the same month. Although predicted to remain constant, the fundamental measure, Nondefense Capital Goods Orders, ex Aircraft, increased by 0.2%.
With the news, the US dollar initially rose but then fell. It is presently rising again due to new weekly highs in Treasury rates. The 10-year note’s yield increased to 3.728%, its highest level for December, while the yield on the -year note increased to 4.327%. Before Wall Street opened, yields maintained their advances, and US indices are set to do the same, following the example set by their international counterparts.
The British pound is still weak, with the most recent macroeconomic data confirming that the country is in a recession that will probably last until at least 2023.
GBP/USD technical outlook
Daily fluctuations in GBP/USD are minimal since winter vacations have reduced trading activity. The GBP/USD pair is developing below a bearish 200 SMA after breaking below it on Thursday, and technical readings on the daily chart point to additional drops in the future. While this is happening, technical indicators continue to go down, remain far above oversold readings, lack directional strength, and show no evidence of bearish fatigue.
The immediate short-term support level, leading to 1.1950, is the weekly low at 1.1990. A daily close to the latter might signal a further slide by next week. The immediate resistance level of 1.2080 is where sellers are accumulating short positions, followed by 1.2140.
