GBP/USD holds steady above 1.2100 as the US Dollar stalls decline.
Mixed sentiment amid dovish Fed and China’s covid woes cap GBP/USD”s upside.
200DMA at 1.2185 remains a tough nut to crack for GBP/USD bulls.
GBP/USD is easing from three-month highs of 1.2153, as bulls take a breather on Black Friday. Amid extended holiday-thinned market conditions, the US Dollar has stalled its decline, as end-of-the-week repositioning seems to be in play.
The Fed November meeting Minutes showed that most board members saw a slower pace of higher appropriate ‘soon’. The dovish pivot in the Fed’s tightening outlook triggered a fresh sell-off in the US Treasury yields, which knocked down the US Dollar across the board.
So far this Black Friday’s trading, the Cable remains at the mercy of the market sentiment, with China’s covid curbs keeping investors on the edge. A partial holiday in the US will leave GBP/USD traders mostly on the sidelines, as the focus shifts toward next week’s US Nonfarm Payrolls (NFP) release.
Nothing seems to have changed technically for GBP/USD, as sellers continue to lurk above the 1.2150 region. Buyers await a sustained break above the bearish 200-Daily Moving Average (DMA) at 1.2185 should the previous day’s high at 1.2153 give way. The next relevant upside barrier is seen at 1.2200, the round number.
The 14-day Relative Strength Index (RSI) has turned flat while above the midline, backing the range trade in the pair, at the moment.
On the flip side, the 1.2050 support area needs to be broken decisively to trigger a corrective decline. The 1.2000 psychological barrier could then come to the rescue of bulls.
The line in the sand for GBP/USD buyers is seen at around 1.1700, where the 21 and 100DMAs hang around.