GBPUSD | Perspective for the new week | Follow-up
Updated
The British Pound (GBP) has been on a rough ride lately, closing out its fifth consecutive week in the red. But a late-week rally brought some hope, pulling the GBP/USD back from its lowest point in five months. Now, all eyes are on the upcoming week, which is packed with key economic data and a crucial Fed decision.
In this video, we'll analyze the GBP/USD currency pair, examining the potential for a bullish rebound in light of the upcoming economic releases and the Fed's likely rate cut.
With the Federal Reserve's September meeting on the horizon, investors are keenly focused on the potential for a rate cut. Current rate markets have priced in the beginning of a rate cut cycle, with the Federal Open Market Committee (FOMC) expected to meet on September 18. Although the probability of a 50 basis point cut was previously high, expectations have adjusted slightly. According to the CME’s FedWatch Tool, there is now a 53.5% chance of a 50 bps cut in September, with further cuts anticipated later in 2024.
Next week’s economic calendar is packed with key data. On Tuesday and Wednesday, we’ll receive the US Producer Price Index (PPI) and Consumer Price Index (CPI) inflation reports, which could provide crucial insights into market direction. Additionally, US Retail Sales and updates from the University of Michigan’s Consumer Sentiment Survey will offer more context for economic trends.
Given these developments, the big question is: will the British Pound be able to maintain its bullish momentum as we head into the new week? Join us as we dive into the charts, analyze the current market conditions, and discuss potential trading opportunities.
GBPUSD Technical Analysis:
Will the pound maintain buying pressure above $1.27500 and the ascending trendline next week? Watch this video for key trades this week. Join the discussion for updates on GBP/USD trading. Stay tuned for more content. Happy trading!
Disclaimer Notice:
Trading in the foreign exchange market and other instruments carries high risk and may not be suitable for all investors. The content provided here is for educational purposes only. Evaluate your financial situation and consult with a financial advisor before making any investment decisions. Past performance is not indicative of future results.
In this video, we'll analyze the GBP/USD currency pair, examining the potential for a bullish rebound in light of the upcoming economic releases and the Fed's likely rate cut.
With the Federal Reserve's September meeting on the horizon, investors are keenly focused on the potential for a rate cut. Current rate markets have priced in the beginning of a rate cut cycle, with the Federal Open Market Committee (FOMC) expected to meet on September 18. Although the probability of a 50 basis point cut was previously high, expectations have adjusted slightly. According to the CME’s FedWatch Tool, there is now a 53.5% chance of a 50 bps cut in September, with further cuts anticipated later in 2024.
Next week’s economic calendar is packed with key data. On Tuesday and Wednesday, we’ll receive the US Producer Price Index (PPI) and Consumer Price Index (CPI) inflation reports, which could provide crucial insights into market direction. Additionally, US Retail Sales and updates from the University of Michigan’s Consumer Sentiment Survey will offer more context for economic trends.
Given these developments, the big question is: will the British Pound be able to maintain its bullish momentum as we head into the new week? Join us as we dive into the charts, analyze the current market conditions, and discuss potential trading opportunities.
GBPUSD Technical Analysis:
Will the pound maintain buying pressure above $1.27500 and the ascending trendline next week? Watch this video for key trades this week. Join the discussion for updates on GBP/USD trading. Stay tuned for more content. Happy trading!
Disclaimer Notice:
Trading in the foreign exchange market and other instruments carries high risk and may not be suitable for all investors. The content provided here is for educational purposes only. Evaluate your financial situation and consult with a financial advisor before making any investment decisions. Past performance is not indicative of future results.
Trade active
This morning, Bank of England (BoE) policymaker Catherine Mann highlighted ongoing concerns about UK wage growth and its impact on inflation, despite the main rate remaining at the bank's 2% target in June. Her comments prompted a brief rally in the British Pound, which gained 0.2% before settling into consolidation.
Looking ahead, market participants will closely monitor the UK employment report scheduled for Tuesday. The data is anticipated to provide insights into the UK economy and influence the future direction of monetary policy. Specifically, the UK unemployment rate is expected to rise to 4.5% for June. Average weekly earnings excluding bonuses are forecasted to decrease to 5.4% year-on-year, while total earnings, including bonuses, are projected to fall to 4.6% year-on-year. Slower-than-expected wage growth could prompt the BoE to maintain a more accommodative stance, potentially weighing on the GBP.
In light of these developments, the newly identified structure on the 1-hour timeframe will be pivotal in guiding our trading strategy. We will delve deeper into these dynamics in our upcoming live session.
Good Morning
Trade active
With two active buy positions running in profit of over 55 pips, the British Pound gained momentum, moving into the key psychological zone at the $1.28000. This upward move was supported by positive UK data released this morning, which revealed a decrease in the ILO Unemployment Rate to 4.2% from 4.4%, boosting demand for the Pound Sterling.
Additionally, the slower-than-expected decline in Average Earnings Excluding Bonuses has tempered expectations for further rate cuts by the Bank of England (BoE).
Looking ahead, we anticipate increased volatility for the British Pound, especially with the release of the UK Consumer Price Index (CPI) for July scheduled for Wednesday.
Given the current market conditions, it is prudent to secure some profits while we continue to observe the price action and maintain a positive sentiment towards the British Pound.
Good Morning
Trade closed: target reached
After reaching our TP target yesterday, the GBP/USD faced renewed bearish pressure, moving towards the ascending trendline as part of a retracement from its recent bullish momentum.
This downturn follows the latest Consumer Price Index (CPI) data from the UK, which showed an annual increase of 2.2% in July, surpassing the Bank of England's (BoE) 2% target. Despite this uptick in inflation, an immediate interest rate hike appears unlikely, as policymakers acknowledge ongoing economic uncertainties. Conversely, the prospect of a rate cut is not on the horizon at the moment.
The key question now is how the market will react to these developments and their impact on the British pound. The market's response will be closely tied to how price action interacts with the ascending trendline on the 1-hour timeframe. This trendline will be crucial in guiding our trading decisions for the remainder of the week. Will the price break down through the trendline or hold its ground?
We will explore this market dynamic in depth during our upcoming live session. Stay tuned for a comprehensive analysis.
Good Morning
Note
In the past 48 hours, GBP/USD has consolidated within a defined range, reflecting ongoing uncertainty after testing the $1.28700 level earlier this week. Recent UK data showed that GDP expanded at an annual rate of 0.9% for Q2, aligning with market expectations and helping the Pound Sterling remain resilient against the US Dollar.
The Pound Sterling continue to benefit from a combination of positive economic data and an expectation of a shift in US monetary policy, while the US Dollar has been subdued in anticipation of interest rate cuts.
Additionally, a dovish shift in the Fed's stance is driving expectations for interest rate cuts in September. The July CPI report indicated a return of price pressures towards the Fed's target rate of 2%, which has further solidified these expectations. Atlanta Fed President Raphael Bostic confirmed his comfort with rate cuts in September and suggested a potential 50 basis point reduction if the labor market deteriorates further.
Today, the US monthly Retail Sales report for July will be a key market driver. This data will offer fresh insights into the state of the US economy and the trajectory of inflation, potentially impacting both the Fed's policy stance and the US Dollar's direction.
In anticipation of this event; a new technical structure has been identified on the chart to guide trading decisions for the remainder of the week.
Good Morning
Trade smart. Trade consciously
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