 |
| GBP/USD Pair Rises on Positive Risk Tone and Subdued USD Demand Amidst Federal Reserve's Hints of a Possible Rate Hike Pause |
GBP/USD pair is seeing a positive trend on Monday as it builds on its steady intraday ascent through the mid-European session. Spot prices have climbed to a fresh daily high around the 1.2270-1.2275 area in the last hour, and this has reversed a significant part of Friday's losses. The rise comes amid the risk-on impulse and a generally positive tone in the equity markets, following the news that First Citizens Bank & Trust Company will buy all of Silicon Valley Bank's deposits and loans from the Federal Deposit Insurance Corporation (FDIC).
The rise in the GBP/USD pair has been supported by the Federal Reserve's hints of a possible pause to its rate-hiking cycle in the wake of the recent turmoil in the banking sector. However, the strong follow-through rally in the US Treasury bond yields is acting as a tailwind for the US Dollar, which is likely to keep a lid on any meaningful upside for the GBP/USD pair. Technical indicators on the daily chart are holding in the positive zone and suggest that some follow-through buying should pave the way for additional gains, allowing the pair to aim back to reclaim the 1.2400 round-figure mark.
The immediate downside is protected by the 1.2230 level, ahead of the 1.2200 round figure and the 1.2175 support zone. A convincing break below this level might prompt some technical selling and drag the GBP/USD pair towards the 1.2100 mark. The 100-day Simple Moving Average (SMA) coincides with the 1.2100 mark, below which spot prices could slide to the next relevant support near the 1.2055-1.2050 region en route to the 1.2000 psychological mark.
