GBP/USD in Rally: Geopolitical Calm Sparks Bullish Momentum
The GBP/USD pair is currently in a bullish phase, trading near its highest level in the past three weeks, just below the 1.2900 mark. This movement followed the easing of concerns about a broader conflict in the Middle East, after recent hostilities between Israel and Hezbollah in Lebanon did not escalate further. The reduction in geopolitical tensions has supported risk sentiment, helping GBP/USD to rise.
Fundamental Analysis
The recent rise in GBP/USD can be attributed to a combination of diminishing geopolitical risks and favorable technical positioning. On Thursday, the pair initially fell towards 1.2800 following positive economic data from the United States. Initial Jobless Claims in the U.S. decreased by 7,000, reaching 227,000, and retail sales for July increased by 1%, well above the expected 0.3%. This positive data temporarily strengthened the U.S. Dollar.
However, with the improvement in risk sentiment throughout the day, GBP/USD regained momentum and closed in positive territory. The resilience of GBP/USD despite the positive U.S. data suggests an underlying bullish momentum driven by risk appetite.
Looking ahead, the U.S. economic calendar includes data on housing starts and building permits for July, along with the preliminary Consumer Sentiment Index from the University of Michigan for August.
Outlook
The short-term direction for GBP/USD will likely be influenced by risk sentiment and potential profit-taking as the week comes to a close. A bullish opening on Wall Street could weaken the U.S. Dollar and support further gains in GBP/USD.
Fundamental Analysis
The recent rise in GBP/USD can be attributed to a combination of diminishing geopolitical risks and favorable technical positioning. On Thursday, the pair initially fell towards 1.2800 following positive economic data from the United States. Initial Jobless Claims in the U.S. decreased by 7,000, reaching 227,000, and retail sales for July increased by 1%, well above the expected 0.3%. This positive data temporarily strengthened the U.S. Dollar.
However, with the improvement in risk sentiment throughout the day, GBP/USD regained momentum and closed in positive territory. The resilience of GBP/USD despite the positive U.S. data suggests an underlying bullish momentum driven by risk appetite.
Looking ahead, the U.S. economic calendar includes data on housing starts and building permits for July, along with the preliminary Consumer Sentiment Index from the University of Michigan for August.
Outlook
The short-term direction for GBP/USD will likely be influenced by risk sentiment and potential profit-taking as the week comes to a close. A bullish opening on Wall Street could weaken the U.S. Dollar and support further gains in GBP/USD.
Note
In my opinion tomorrow we could see a solid bullish reaction. Price is ready to reach the level 1.35/1.36
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