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Denis Sergienko • 2022-12-16

GBPUSD stays pressured despite sluggish markets as BOE, UK Retail Sales disappoint

GBPUSD stays pressured despite sluggish markets as BOE, UK Retail Sales disappoint

The big week finally comes to an end with more or less inactive trading on Friday, even as a slew of PMIs could offer the last blow. Global markets turned volatile the previous day as multiple central banks announced 0.50% rate hikes and spread hawkish messages, except for the Bank of England (BOE) which suggested easing in rates going forward.

GBPUSD had to bear the burden of the “Old Lady’s” dovish hike, in addition to downbeat UK Retail Sales, even as the US Dollar struggles to defend the previous day’s recovery.

EURUSD occupies the other end due to the ECB’s hawkish mood and expectations of economic recovery in the bloc.

That said, the US Dollar seesaws around the multi-day low as mixed US data joined confusing headlines from China. Also likely to have challenged the greenback’s latest moves could be the anxiety ahead of the first readings of the US PMIs for December.

Gold remains pressured while Brent oil prices drop for the second consecutive day. That said, equities are mostly down in the Asia-Pacific, as well as European markets.

Further, cryptocurrencies lick their wounds amid sluggish sessions and headlines suggesting relief from Japan to BTCUSD and ETHUSD traders.

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Following are the latest moves of the key assets:

  • Brent oil extends the previous day’s pullback from weekly top towards $81.00.
  • Gold stays pressured around $1,777 after two-day downtrend.
  • USD Index struggles to defend the previous day’s rebound from six-month low.
  • Wall Street closed negative and exerted downside pressure on the stocks in Europe and the UK.
  • BTCUSD and ETHUSD both print mild gains and are ready for a positive weekly close around $17,500 and $1,280 in that order.

Markets play the last round

After a volatile week filled with multiple data and central bank announcements, traders remain mostly calm during early Friday. However, the economic pessimism spread through a slew of rate hikes kept the bulls directed toward the US Dollar, even if the greenback struggled of late.

UK’s downbeat Retail Sales for November followed BOE’s dovish hike to exert additional downside pressure on the GBPUSD whereas EURUSD cheers the ECB’s readiness for more and higher rate lifts.

Further, China’s insatiable urge for more stimulus and the US sanctions on chipmakers tried to confuse the traders during a sluggish Friday. As a result, the gold price remains lackluster but oil remains depressed.

Elsewhere, Japan’s easing of crypto tax and hopes of more funding for the once-preferred assets helped BTCUSD and ETHUSD to brace for a positive weekly closing.

  • Strong buy: GBPUSD
  • Strong sell: ETHUSD, USDJPY
  • Buy: USD Index, USDCAD, Nasdaq, EURUSD
  • Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

PMIs are in focus

Having witnessed downbeat prints of the UK Retail Sales, preliminary readings of the December month activity data for Germany, the Eurozone, the UK and the US will be crucial for the markets to watch for clear directions. However, fears of recession and higher rates could allow the US Dollar to defend the latest gains and end 2022 on a positive note.

May the trading luck be with you!