GBPUSD | Perspective for the new week | Follow-up

Updated

Dive into the GBP/USD market dynamics with us as we dissect its recent movements and chart a course for the week ahead.

After a brief dip to a weekly low sparked by disappointing UK Retail Sales data, GBP/USD bounced back and steadied above the 1.2700 mark. The USD's struggle to attract demand amid positive risk sentiment has provided support, allowing the pair to maintain its position.

The UK's Office for National Statistics (ONS) reported a 2.3% monthly decline in Retail Sales for April, worse than the anticipated 0.4% contraction, hindering Pound Sterling's upward momentum.

Conversely, across the Atlantic, US Durable Goods Orders surpassed expectations, though a downward revision to the previous month's figures tempered the impact, bolstering demand for the British Pound.

With limited high-impact economic releases expected from the UK in the near term, this video delves into our strategies for navigating the evolving market landscape in the week ahead. Join us as we analyze potential trading opportunities and chart our course forward

GBPUSD Technical Analysis:
Will the pound hold above $1.27000? Watch this video for key trades this week. We analyze trends and levels for market insights. 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.

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The GBP/USD market is currently trading with modest fluctuations, maintaining a narrow range between $1.27440 and $1.27290. This suggests prevailing uncertainty in the market as investors digest recent positive US economic data and reassess the likelihood of a Fed rate cut in September, which has decreased to 44.9% from 49.0% a week earlier.

Today's market may experience thin liquidity and minimal volatility due to the UK Spring Bank Holiday and the Memorial Day bank holiday in the US. This could contribute to subdued trading activity and extend the sideways market structure.

Amidst these holiday conditions, it's crucial to remain vigilant and rely on the levels established on the chart as our guiding reference for today's trading activities.

Good Morning.

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UPDATE

Buy position triggered

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Two buy positions now triggered; secure some profit as we look out for new trading opportunities.

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GBP/USD is currently consolidating its recent gains around the $1.27800 region, with the US Dollar maintaining a weakened stance amidst improving risk sentiment.

This consolidation phase indicates market anticipation surrounding key upcoming events, including the release of the US Conference Board’s Consumer Confidence data, FHFA’s House Price Index, and speeches from Fed officials Neel Kashkari, Mary Daly, and Lisa Cook later today.

The bullish momentum of the Pound Sterling (GBP) can be attributed to expectations that the Bank of England (BoE) will likely extend its period of maintaining borrowing costs to counter inflationary pressures.

Looking ahead, crucial US economic data scheduled for this week, particularly the first-quarter GDP growth figures and the US Core Personal Consumption Expenditures Price Index (Core CPE), may provide insights into the economic outlook and inflation trajectory. A stronger-than-anticipated inflation report from the US could potentially bolster the US Dollar and exert downward pressure on GBP/USD in the short term. As a result, it is prudent to secure all existing buy positions while closely monitoring price action.

Good Morning

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#GBPUSD

Secure some more profit as we look out for new trading opportunities

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#GBPUSD

All buy positions closed with profit; The ascending trendline and the $1.27800 price level will play a key role in determining the strength of the uptrend continuation. Please refer to the structures on the chart for new trading opportunities.

Trade closed manually

All sell positions have been closed as the British Pound shows signs of modest recovery. The British Retail Consortium (BRC) reported that both food and non-food item prices in UK shops saw slower growth in May compared to previous periods. This adjustment in prices reflects retailers' efforts to offer more competitive pricing, ultimately benefiting consumers.

A softer UK inflation outlook could heighten expectations of potential rate cuts by the Bank of England (BoE). Investors are eyeing the August meeting as a potential starting point for the BoE's policy-normalization process.

Given the recent recovery of the US Dollar amidst uncertainty surrounding the upcoming US core PCE price index, it's prudent to exercise patience and await clear confirmation before committing to any directional trades. We'll delve deeper into this market dynamic in our upcoming live session. Looking forward to our discussion!

Good Morning

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#GBPUSD

STRUCTURAL UPDATE | 15 Min Timeframe

Note

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#GBPUSD

Secure sell positions now

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#GBPUSD

Four sell positions triggered; secure some profit now

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All sell positions have been closed as buying pressure resumes. However, a broadly stronger US Dollar, amid waning expectations of a Fed rate cut and prevailing risk-aversion, keeps the pair undermined ahead of today's US GDP data.

Fed officials have maintained a consistent narrative and cautious tone on the inflation outlook, prompting traders to reduce their bets on an easing cycle this year.

Today's US Gross Domestic Product (GDP) report is highly anticipated. If the report shows a stronger-than-expected reading, it could further boost the USD and create a headwind for GBP/USD. Additionally, the US weekly Initial Jobless Claims, Goods Trade Balance, and Pending Home Sales are due later today. Fed officials Raphael Bostic, John Williams, and Lorie Logan are also scheduled to speak.

On the UK front, growing speculation that the Bank of England (BoE) will start cutting interest rates in its August meeting, due to a softer UK inflation outlook, may weigh on the British pound. At this juncture, the path of least resistance appears bearish. Any new developments that project otherwise will be promptly communicated.

Good Morning

Note

#GBPUSD

UPDATE

New structure ahead of US GDP data

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#GBPUSD

UPDATE

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#GBPUSD

It is time to secure the buy position

Trade closed manually

All buy positions have been closed as the British Pound remains under pressure, yet holds above our week's key level $1.27000 zone, a key confluence in the current market dynamic.

Mixed sentiment pervades as the market treads cautiously, anticipating the release of the United States Core Personal Consumption Expenditure (PCE) Price Index data for April later today. Investors will closely watch this report for significant cues about the Fed's potential rate-cut path.

If the core PCE data meets expectations, it is unlikely to prompt the Fed towards rate cuts, as policymakers have indicated they want to see a sustained decline in inflation before considering policy normalization. A hotter-than-expected inflation reading would delay market speculation about rate cuts until November, while softer figures could boost prospects for a rate reduction starting in September.

We will rely on the chart structure to guide us ahead of today's US economic data in light of these developments. Stay tuned for updates.

Good Morning

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#GBPUSD

US core PCE inflation stays unchanged at 2.8% as expected... Buy position triggered; secure some profit as we look out for new trading opportunities.

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#GBPUSD

Two buy positions triggered; secure some profit now

darcsherry

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GBPUSD | Perspective for the new week | Follow-up

by darcsherry

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