GBP/USD Analysis: Bullish Continuation on USD Weakness
As scrutinized in the recent market activity, the GBP/USD pair has reasserted its upward trajectory, with economic indicators signaling a dampening strength of the USD. The pause in rate hikes and expected rate cuts by the Federal Reserve, influenced by the moderating Consumer Price Index (CPI) which will be released this week, augments our bullish stance on GBP/USD due to anticipated weakness in the USD.
Technical analysis: Despite the recovery attempt by the Dollar Index (DX), a technical selling opportunity is unveiled, while the GBP/USD has shown resilience, propelling its value back towards the 1.2820 region. The currency pair's advance towards higher levels is predicated on a decisive breakthrough and closure above the resistance marked in red. Should it fail to overcome this barrier, the support zone highlighted in blue, approximately around the 1.265 area, may emerge as an attractive target for traders, presenting a compelling trade prospect.
As the pair broke out of its resistance and descending trendline, it has shown great strength and as expected pushing upwards to the main resistance area. This push upwards comes a week after gold’s big rally, both bolstered by a weak dollar. We’d have to see a surprise in the CPI reports this week to maybe rethink our bullish stance, but the sentiment doesn’t seem that way so far. Maybe a correction happens, as GBPUSD might come back down to retest 1.278 as a pullback which would be a great buying opportunity.
Nonetheless, the Pound's robustness implies that with a retreat in DX, challenging the upper resistance is a plausible scenario. Should the support near 1.2800 falter, a decline towards the 1.264 area could ensue, yet any significant shifts don’t seem very likely in the near term.
Our position: As the pair came to the 0.618 Fibonacci retracement level, we entered our position, then we doubled down when the price broke put of the descending trendline confirming our bullish stance. With a bullish outlook, we continue to seek entry points for long positions, particularly if the price that validates a surge beyond the marked resistance. The market's adjustment to the Fed's rate hike intermission renders a bullish strategy increasingly appealing for the GBP/USD pair.
Technical analysis: Despite the recovery attempt by the Dollar Index (DX), a technical selling opportunity is unveiled, while the GBP/USD has shown resilience, propelling its value back towards the 1.2820 region. The currency pair's advance towards higher levels is predicated on a decisive breakthrough and closure above the resistance marked in red. Should it fail to overcome this barrier, the support zone highlighted in blue, approximately around the 1.265 area, may emerge as an attractive target for traders, presenting a compelling trade prospect.
As the pair broke out of its resistance and descending trendline, it has shown great strength and as expected pushing upwards to the main resistance area. This push upwards comes a week after gold’s big rally, both bolstered by a weak dollar. We’d have to see a surprise in the CPI reports this week to maybe rethink our bullish stance, but the sentiment doesn’t seem that way so far. Maybe a correction happens, as GBPUSD might come back down to retest 1.278 as a pullback which would be a great buying opportunity.
Nonetheless, the Pound's robustness implies that with a retreat in DX, challenging the upper resistance is a plausible scenario. Should the support near 1.2800 falter, a decline towards the 1.264 area could ensue, yet any significant shifts don’t seem very likely in the near term.
Our position: As the pair came to the 0.618 Fibonacci retracement level, we entered our position, then we doubled down when the price broke put of the descending trendline confirming our bullish stance. With a bullish outlook, we continue to seek entry points for long positions, particularly if the price that validates a surge beyond the marked resistance. The market's adjustment to the Fed's rate hike intermission renders a bullish strategy increasingly appealing for the GBP/USD pair.
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