GBP/USD Extends Decline as US Dollar Strengthens - FUNDAMENTAL
During the European trading hours, GBP/USD is experiencing a drop towards the 1.2400 level after facing rejection just shy of 1.2500. Despite a mixed market mood, the US Dollar is holding onto its recovery gains, exerting downward pressure on the pair. Traders are eagerly awaiting the testimony of Bank of England Governor Andrew Bailey, as it could provide fresh impetus for trading.
GBP/USD has continued its downward slide mid-week, reaching its lowest level since late April near 1.2420. The pair's bearish outlook remains intact in the short term, with sellers likely to dominate the market as long as the 1.2500 level acts as resistance.
The US Dollar has benefited from risk aversion on Tuesday, putting GBP/USD on the defensive. Although recent headlines suggest that a deal to raise the US debt ceiling could be reached by the end of the week, market caution prevails on Wednesday.
According to a report from the Wall Street Journal, House Democrats are planning to collect signatures for a "discharge petition to raise the debt ceiling."
In the European session, the UK's FTSE 100 Index is trading flat, while US stock index futures show mixed performance.
Meanwhile, UK Finance Minister Jeremy Hunt expressed full support for the Bank of England's policy decision and acknowledged that there is no automatic solution to bring down inflation. However, these comments failed to generate demand for Pound Sterling.
In the latter half of the day, market participants will closely watch the release of Housing Starts and Building Permits data from the US for potential market-moving catalysts. If these data remind the market of the negative impact of the Federal Reserve's tight policy on the real estate sector, the US Dollar could weaken, potentially allowing GBP/USD to stage a rebound.
It is also worth noting that the valuation of the US Dollar will continue to be influenced by the overall risk sentiment during the American session. A further decline in Wall Street's main indexes would support the US Dollar, while the opposite could weaken the currency.
GBP/USD has continued its downward slide mid-week, reaching its lowest level since late April near 1.2420. The pair's bearish outlook remains intact in the short term, with sellers likely to dominate the market as long as the 1.2500 level acts as resistance.
The US Dollar has benefited from risk aversion on Tuesday, putting GBP/USD on the defensive. Although recent headlines suggest that a deal to raise the US debt ceiling could be reached by the end of the week, market caution prevails on Wednesday.
According to a report from the Wall Street Journal, House Democrats are planning to collect signatures for a "discharge petition to raise the debt ceiling."
In the European session, the UK's FTSE 100 Index is trading flat, while US stock index futures show mixed performance.
Meanwhile, UK Finance Minister Jeremy Hunt expressed full support for the Bank of England's policy decision and acknowledged that there is no automatic solution to bring down inflation. However, these comments failed to generate demand for Pound Sterling.
In the latter half of the day, market participants will closely watch the release of Housing Starts and Building Permits data from the US for potential market-moving catalysts. If these data remind the market of the negative impact of the Federal Reserve's tight policy on the real estate sector, the US Dollar could weaken, potentially allowing GBP/USD to stage a rebound.
It is also worth noting that the valuation of the US Dollar will continue to be influenced by the overall risk sentiment during the American session. A further decline in Wall Street's main indexes would support the US Dollar, while the opposite could weaken the currency.
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