GBP/USD Attempting to keep the price above 1.2000 in the positive

GBP/USD recouped losses and flirted with daily highs after a brief slide to a new daily low of 1.2022. As speculative interest continues to examine contradictory macroeconomic data from the United States, the currency is now trading in the region of 1.2040-1.2060. On the one hand, the Personal Consumption Expenditures (PCE) Price Index rose 5.5% year over year in November, down from 6.1% in October, showing a significant reduction in inflationary pressures in the country.

In contrast, Durable Goods Orders unexpectedly declined by 2.1% month-over-month in the same month, which was significantly worse than the 0.6% loss that market participants had anticipated. Nonetheless, the key statistic, Nondefense Capital Goods Orders excluding Aircraft, climbed by 0.2%, beating the expected reading of 0.0%.

The US Dollar initially rose in response to the news, but has since recovered as a result of weekly highs in Treasury yields. The yield on the 10-year note reached its highest level for the month of December at 3.728%, while the yield on the -year note rose to 4.322%. Prior to the opening of Wall Street, rates sustained their gains, while US indexes are expected to open with moderate gains, mirroring their foreign counterparts.

In the meantime, the British Pound remains weak as recent macroeconomic indicators indicate that the United Kingdom will continue in recession well beyond 2023.

The GBP/USD exchange rate is reasonably stable on a daily basis as a result of the advent of winter holidays, which reduces trade volumes. As the pair continues to trade beneath a bearish 200-day simple moving average (SMA) after breaking below it on Thursday, technical indicators on the daily chart indicate that further declines are ahead. In the interim, technical indicators evolve inside negative levels, devoid of directionality but displaying no signs of bearish tiredness and well above oversold levels.

The weekly low of 1.1991 is the nearest near-term support level leading to 1.1950. A daily close at the latter level may portend a more precipitous decline the following week. At the immediate resistance level of 1.2080, sellers are building short positions, followed by 1.2140.