On Thursday morning, the GBP/USD pair attracted some buyers below the psychological 1.2700 level during the early Asian session. Nevertheless, the main pair finds some support in the weaker US dollar. Today, the GBP/USD is trading near 1.2695, an increase of 0.02%.

The daily chart for the GBP/USD pair indicates that it trades near its opening level, but that it has also recorded higher highs and lows, which maintains an upward risk bias. Simultaneously, the Relative Strength Index (RSI) indicator is encountering a decline in strength at approximately 70, whereas the Momentum indicator is firmly ascending, well above its 100 level. In conclusion, the pair establishes itself above every one of its moving averages, with the 20 Simple Moving Average (SMA) sustaining a strong ascent just below the 200 and 100 SMAs, which lack direction.

The GBP/USD pair is currently overbought, but a more severe decline is not imminent. After reaching extreme levels, technical indicators have entered a retreating phase, but their downward intensity is limited. Simultaneously, the pair develops substantially above a bullish 20 SMA and continues to advance above bullish 100 and 200 SMAs.

After the significant depreciation of the US Dollar on Tuesday, the GBP/USD pair reached a peak of 1.2732, its highest level since late August. In response to unexpectedly dovish remarks from Federal Reserve (Fed) officials, the Greenback declined, reinforcing the market’s perception that the central bank has completed raising interest rates.

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The US Dollar gained ground early on Wednesday as investors withdrew a portion of their gains in anticipation of the release of first-tier data. The GBP/USD pair is trading near 1.2680 at the midpoint of the European trading day, following the release of encouraging minor figures from the United Kingdom (UK) earlier in the day. October Consumer Credit increased by an unexpected £1.289 billion, which fell short of expectations and was lower than September. In contrast, M4 Money Supply increased 0.3% month-over-month in October, while mortgage approvals surged to 47.38K during the same month.

A further decline in yields on US government bonds, meanwhile, restrains USD gains. Presently, the 10-year Treasury note is priced at 4.29%, the lowest level in two months, whereas the 2-year note is priced at 4.70%, the lowest level since mid-July.

The second estimate of the Gross Domestic Product (GDP) for the third quarter, which the United States (US) is anticipated to disclose, will confirm the annual growth rate of 5%, a marginal improvement from the previous 4.9%. Furthermore, the London Foreign Exchange Joint Standing Committee will commemorate its 50th anniversary with an event where Bank of England (BoE) Governor Andrew Bailey will deliver brief remarks. Several Federal Reserve lecturers will also be scheduled to participate in the proceedings.


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