The GBP/USD pair got back on track after a small slide this session. After falling to session lows following the OBR UK economic growth forecasts, the pairing has reached a 3-week high and looks to reach 1.33 before session’s end. It regained traction after the US Dollar was getting a lot of selling pressure. With the holidays around the corner, it will be important to keep an eye on the fluctuation of the USD, as the selling of goods should likely increase during this time.
Effects of U.S. Data
The selling bias surrounding the U.S. Dollar resulted from the release of U.S. data showing that durable goods orders had fallen by more than 1% after three straight months of hefty gains. Nevertheless, an increase in shipments has shown that the USD is gaining momentum heading into the final month of the year. The biggest contributing factor to the drop was a 0.5% decrease in orders for non-defense capital goods, excluding aircraft. That margin represents the biggest drop since September 2016, which explains why it temporarily threw a few currency pairs out of whack. With the GBP/USD pair regaining value, investors look forward to the FOMC meeting minutes to see which direction it will head moving forward.
What to Watch
The momentum pushing the GBP/USD beyond the 1.3280 ranged could prove to be enough to boost the pair beyond the targeted 1.33 handle. On the other hand, any pull-back from the current highs might require immediate support around the 1.3115 region, which will be closely followed by the 1.31 figure. It’s important to consider the turmoil that the British government is going through. For now, a Bank of England rate hike and questions about Prime Minister Theresa May’s leadership has not been enough to directly affect the value of the GBP; however, when the breakout ensues, it could be violent.