• USD revival dents GBP-USD ahead of upcoming central bank meetings.
• Chancellor Hunt plans to enhance London’s competitiveness.

The United States dollar extends its comeback, following better-than-anticipated U.S. economic data & higher U.S. bond yield. Meanwhile, this week’s steady U.S. ISM data and last Friday’s massive non-farm payroll figures have propelled anticipations that the United States economy is stable-than-expected and the Federal may be flexible regarding rate hikes.

The supportive bond market is aiding the United States dollar high after the USD hit new 5-month lows on Tuesday. Meanwhile, the technical patterns indicate that DXY trades within the 200-d Moving Average and presses against hurdles from multiple prior lows & highs.

U.S Dollar (DXY)

Jeremy Hunt, UK’s Exchequer Chancellor, will introduce multiple reforms later in the week to boost London’s competitiveness. Several media reports show the new Chancellor will trim-off ring-fencing regulations on the United Kingdom’s leading banks and moderate Solvency 11 policies to enhance the insurance industry’s competitiveness.

Multiple central banks will introduce updated financial policy decisions as the Christmas break approaches. Analysts believe the Federal Reserve will execute a 50 basis point hike next Wednesday. Moreover, they expect the Bank of England to introduce a half-percentage point increase the following day.

As a rule of the game, market players should closely watch post-decision conversations. Cable traded at 1,2150’s on either side early today, nearly two massive digits lower than its Monday multi-month peak.

The 200-d Moving Average is propping up cable, whereas medium- and short-term Moving Averages pointed highs, increasing the positive sentiment observed in GBP-USD within the past few weeks. A downward break would see the pair exploring 1.2050.

GBP-USD 24Hr Price Chart

Retail trader stats show around 45.39% of players are net long, with the ratio between long and short at 1 to 1.20. Net long traders are 3.12% more than yesterday and around 7.9% lower over the past week. Meanwhile, net-short traders stood at 1.48% lower than the previous day & 2.68% lower than the last week.

Net-short traders confirm GBP-USD prices might keep soaring. Positioning remains less net-short than the past day but more net-short since last week. The prevailing sentiment and latest changes prints a mixed trading bias for GBP-USD.