GBPUSD analysis week 36
🌐Fundamental Analysis
The British Pound (GBP) extended its two-day losing streak and hit a fresh intraday low below 1.3150 against the US Dollar (USD) in the North American session on Friday. The GBP/USD pair failed to gain as the US Dollar strengthened following the release of weaker-than-expected US Personal Consumption Expenditures (PCE) Price Index data for July. The US Dollar Index (DXY), which tracks the value of the Greenback against six major currencies, surged above 101.50.
The impact of PCE inflation data is traditionally high as it is the Federal Reserve’s preferred inflation measure for making interest rate decisions. This time, the impact of core inflation data is expected to remain limited to market speculation on the Fed’s rate cut path this year.
Currently, financial market participants expect that the Fed will almost certainly start cutting interest rates in September. However, signs of rigidity in price pressures from PCE inflation data have reduced bets supporting the Fed to start a strong policy easing cycle.
📊Technical analysis
As analyzed last week, GBPUSD has retreated when it reached a strong resistance zone. The retreat may continue next week to attract buyers to push the price up further. In fact, GBPUSD is in a strong uptrend. On the D1 time frame, the EMA 34 is sloping up sharply compared to the EMA 89, indicating that the market structure is leaning towards the upside, the retreat is only pushing the price up in the near future. The nearest trading range is around 1,300-1,327. These are two strong resistance and support zones and also the price range where investors can enter orders. With a perfect retracement it is possible to push the price to the old peak around 1.342 and the strongest retracement is supported at 1.284.
Resistance: 1.327-1.342
Support: 1.300-1.284
🕯Trading Signals
SELL GBPUSD zone 1.327-1.329 Stoploss 1.331
BUY GBPUSD zone 1.300-1.298 Stoploss 1.296
The British Pound (GBP) extended its two-day losing streak and hit a fresh intraday low below 1.3150 against the US Dollar (USD) in the North American session on Friday. The GBP/USD pair failed to gain as the US Dollar strengthened following the release of weaker-than-expected US Personal Consumption Expenditures (PCE) Price Index data for July. The US Dollar Index (DXY), which tracks the value of the Greenback against six major currencies, surged above 101.50.
The impact of PCE inflation data is traditionally high as it is the Federal Reserve’s preferred inflation measure for making interest rate decisions. This time, the impact of core inflation data is expected to remain limited to market speculation on the Fed’s rate cut path this year.
Currently, financial market participants expect that the Fed will almost certainly start cutting interest rates in September. However, signs of rigidity in price pressures from PCE inflation data have reduced bets supporting the Fed to start a strong policy easing cycle.
📊Technical analysis
As analyzed last week, GBPUSD has retreated when it reached a strong resistance zone. The retreat may continue next week to attract buyers to push the price up further. In fact, GBPUSD is in a strong uptrend. On the D1 time frame, the EMA 34 is sloping up sharply compared to the EMA 89, indicating that the market structure is leaning towards the upside, the retreat is only pushing the price up in the near future. The nearest trading range is around 1,300-1,327. These are two strong resistance and support zones and also the price range where investors can enter orders. With a perfect retracement it is possible to push the price to the old peak around 1.342 and the strongest retracement is supported at 1.284.
Resistance: 1.327-1.342
Support: 1.300-1.284
🕯Trading Signals
SELL GBPUSD zone 1.327-1.329 Stoploss 1.331
BUY GBPUSD zone 1.300-1.298 Stoploss 1.296
Note
GBP/USD takes a step higher as Greenback cools
GBP/USD climbed for a second straight day on Thursday, setting up for a bullish recovery despite failing to recapture the 1.3200 level. Market sentiment held on the high side as a decline in new jobs growth kept hopes for an extended rate cut from the Federal Reserve (Fed) pinned to the ceiling.
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