GBP/USD has fallen below the critical support level identified at the 200-day Simple Moving Average of 1.3331, experiencing a decline of approximately 0.21% on Tuesday as market participants prepare for the Federal Reserve’s policy decision scheduled for Wednesday. Currently, the pair is trading below 1.3300, having previously peaked at 1.3356. GBP/USD has fallen below 1.3300 following a significant increase in JOLTS job openings to 7.67 million in October, which has heightened demand for the US Dollar. Mixed commentary from the BoE underscores concerns about inflation, bolstering the view that monetary policy could remain restrictive for an extended period. Declining UK Retail Sales increase pressure as markets anticipate the Fed’s decision and evaluate the evolving dynamics of global interest rate paths. Recent economic data from the US indicates that job openings in October increased from 7.658 million to 7.67 million, as reported.
Based on the data, the pair fell below 1.3300. Previously, the ADP Employment Change 4-week average indicated that businesses employed an average of 4,750 individuals weekly for the four weeks concluding on November 22, reflecting an improvement from the previous figure of -13,500. Across the pond, Bank of England members expressed ongoing concerns regarding elevated inflation levels. Swati Dhingra, a prominent dove, raised alarms regarding food prices even amidst the current disinflationary trends. Clare Lombardelli, who has recently taken on her new role, expresses concern regarding the potential upside risks to inflation and indicates that she is not fully convinced that the current policy stance is sufficiently restrictive.
Additionally, BoE’s Catherine Mann emphasized that inflation persistence continues to be her primary perspective, while Dave Ramsden indicated that he does not dismiss the concern regarding persistence. In terms of data, BRC Retail Sales for November declined from 1.5% YoY to 1.2%, falling short of the anticipated 2.4%.
The technical analysis indicates that the pair is neutral to upward biased; however, the decline below the 200-day SMA exposes GBP/USD to potential further losses. The subsequent support level is the 50-day SMA at 1.3259; if this level is breached, anticipate a test of the 20-day SMA at 1.3201. Additional downside potential is observed around the 1.3150 level.