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"GBP/USD Forecasted to Reach 1.3500 in 2024"In a recent note, the global FX head at Goldman Sachs has indicated that GBP/USD is poised to extend its upward momentum to reach 1.3500 in the coming year. Citing correlations with stocks and alleviated concerns about global recession, GBP exhibits a "positive and reliable relationship with higher stock prices." The recent strength of the British pound is attributed, in part, to the broad weakening of the U.S. dollar. However, since early November, the pound has also demonstrated strength based on trade-weighted fundamentals, performing exceptionally well in a moderately volatile interest rate environment and amid rising stock prices. The outlook since November has been promising, and expectations are for further gains in the upcoming year. This is why Goldman Sachs believes that the British pound has considerable room for appreciation as the market embraces the 'soft landing' perspective. Upcoming elections are likely to encourage additional fiscal support while easing trade tensions with the EU. Both factors are expected to contribute to domestic growth, mitigating the risk of a recession and bolstering the British pound. As we anticipate the unfolding of 2024, the projections for GBP/USD remain optimistic, driven by a combination of global economic dynamics, domestic factors, and a supportive political landscape. Investors and traders alike will be closely watching these developments as they navigate the foreign exchange market in the coming year.
by AdmamTrade
"GBP/USD Forecasted to Rise to 1.3500 in 2024"In a recent update, the global FX head at Goldman Sachs has predicted that GBP/USD is poised to extend its upward momentum to reach 1.3500 next year. Citing correlations with stocks and easing concerns about global recession, Goldman Sachs notes that GBP has a "reliable positive relationship with higher stock prices." The recent surge in the British pound is partly attributed to the broad weakness of the US dollar. Since early November, the pound has also strengthened based on trade-weighted grounds, showcasing resilience in an environment of moderate interest rate volatility and rising stock prices. Goldman Sachs anticipates more of the same in the coming year, asserting that the British pound has ample room for appreciation as the market embraces the notion of a "soft landing." The upcoming elections are likely to both encourage additional fiscal support and alleviate some trade conflicts with the EU. Both outcomes are expected to bolster domestic growth, mitigate the risk of recession, and further support the British pound. As we approach 2024, the forecast for GBP/USD looks optimistic, driven by a combination of global economic factors and domestic political developments. Investors will be keenly observing the unfolding dynamics in the currency markets as the British pound aims for new heights against the US dollar.
by Larissa-Trader
GBPUSD strategy today will drop sharplyThe dollar fell sharply on Thursday and is on track for an annual decline after two years of strong gains as expectations of an interest rate cut from the Federal Reserve next year are holding back markets. As the year comes to a close, thin liquidity and limited volatility are predicted until the new year. The dollar index, a measure of the US currency against six rivals, fell to a new five-month low of 100.81. The index fell 0.5% on Wednesday and is on track to fall 2.6% this year, shedding two straight years of strong gains. According to the CME FedWatch tool, investors remain focused on the timing of a Fed rate cut, with the market pricing in an 89% chance of a cut by March 2024. Futures imply up to 158 basis points about the Fed easing next year.
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by NicoTradingMaster
GBP/USD Resilient Above 1.2800 Amidst Dollar WeaknessGBP/USD saw a slight uptick above 1.2800 in early European trading on Thursday, supported by the prolonged weakness of the US Dollar due to bets on the Fed's dovish stance. US unemployment benefit claims data was released in a relatively quiet market. The currency pair, currently trading just above 1.2700, may find technical buyer interest if it confirms this level as support. In such a case, 1.2750 and 1.2790-1.2800 serve as potential resistance levels. Failure to hold above 1.2700 could prompt support at 1.2660 (50-period SMA), 1.2630 (100-period SMA), and 1.2600 (23.6% Fibonacci retracement). GBP/USD, influenced by broad USD selling pressure on Thursday, sought to recover losses, maintaining stability around 1.2700 as the market assessed the latest UK data on Friday.
by Larissa-Trader
USD Volatility on Fed Rate Cut SpeculationThe US dollar grapples with challenges in gaining traction globally, impacted by recent indications of cooling inflation in the US. This trend raises expectations of a potential Federal Reserve interest rate cut in the coming year. In thin holiday trading, major currencies remain stable, with the yen holding near yearly highs, supported by expectations of the Bank of Japan shifting away from ultra-loose monetary policies. Key Points: Declining US inflation in November fuels expectations of a 2024 Fed rate cut, diminishing USD appeal. BOJ Governor Ueda's comments on rising inflation stir speculation of policy changes, boosting the yen. Global risk sentiment and broader economic trends may influence currency markets in the weeks ahead. Looking Ahead: USD fate depends on upcoming inflation data and Fed rhetoric in the new year. Yen direction hinges on BOJ actions and hints regarding policy normalization. Global risk sentiment will likely impact currency markets in the coming weeks.
by Larissa-Trader
Expectations and Analysis of GBP/USDForecasting GBP/USD, the British Pound against the US Dollar, based on performance on the daily chart below, indicates that it is still moving within an upward channel. Recent developments have been a response to signals from global central banks in their final meetings of 2023. However, the economic weakness in the UK continues to hinder a strong upward move of the British Pound against other currencies. Technically, the bullish side still needs to break through successive resistance levels at 1.2785 and 1.2850. To confirm control and ultimately advance towards the next psychological resistance level at 1.3000. On the other hand, returning to the support level at 1.2580 during the same timeframe will be crucial for the bearish side to gain control of the trend. Limited movements are expected today given the market conditions and the holiday season. Throughout this week, restricted movements are anticipated as investors are reluctant to exit the market during the holiday season, affecting liquidity.
by AdmamTrade
GBPJPY) 4H) tame frame ) analysis)Speculation about when the Bank of Japan will end its negative interest rate policy (NIRP) has been rife, but seen as more likely to come in January than December. Price action in JPY-related FX option markets isn't offering many clues, with increased demand and high volatility risk premiums for both meetings, and also for a speech by BoJ Governor Kazuo Ueda on Dec. 25. Deutsche shares sentiment with other banks who expect the Bank of Japan to maintain its current monetary policy framework in December, while hinting at an end to the NIRP at its Jan. 23 meeting. Deutsche attribute a 60% probability to hints being made. In terms of fundamentals, Deutsche believe that ending NIRP in January is appropriate because the forecast in the outlook report will change since the data already imply a virtuous circle in wages and prices. In terms of practicalities, it is because financial institutions would have sufficient time to prepare for it. Deutsche suspect that the BoJ will hint at the upcoming policy revision by including some key points in its statement; that it will assess and confirm the virtual circle between wages and prices by the January meeting, with the results to be published at the same time as the outlook report; and that, as a result of this assessment, the policy revision will be judged appropriate and it will continue to emphasize an accommodative policy stance and stable JGB markets even after the revision. Overnight expiry FXO implied volatility
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by SMC-Trading-Point
2
"Speculation Mounts on Early Fed Rate Cuts"Investors are increasingly hopeful about potential interest rate cuts by the Federal Reserve in the first half of the upcoming year, despite officials, including Chairman Jerome Powell, maintaining that rate cuts are not currently on the table. Some analysts suggest a possible rate cut as early as the first quarter. Recent inflation figures and real-time forecasts indicate a noticeable economic slowdown since summer, deviating from the robust growth seen in the third quarter. Futures contracts reflect a growing belief in a rate cut within the next few months, with a 44% chance of the first cut occurring in March. If these predictions hold true, the impact on the Fed's longer-term strategy of raising interest rates could be significant, according to economists like Diane Swonk from KPMG. The Fed's two-day policy meeting this week is expected to conclude with the central bank maintaining the highest interest rates in 22 years for the third consecutive meeting. Officials will also release updated economic projections, likely indicating a faster-than-expected cooling of inflation. Despite some officials, including Powell, suggesting it's too early for rate hikes, investors believe the Fed's commitment to data-dependency may lead to early rate cuts. Powell's recent comments in Atlanta, stating no plans for rate hikes, resulted in a stock market surge as it echoed his dovish stance.
by Larissa-Trader
GBP/USD Sustains Three-Week Rally, Holding Above 1.2550GBP/USD has rebounded to the 1.2550 level after nearing 1.2500 in the latter half of the day following a stronger-than-expected Non-Farm Payroll (NFP) data of 199,000 in November. Despite the recent recovery, the pair remains on track to secure a three-week winning streak. GBP/USD may face immediate support at 1.2550-1.2560 (static level, Fibonacci retracement level of 23.6% of the latest uptrend). Closing below this level in the 4-hour chart could attract technical sellers, opening up the possibility of an extended decline to 1.2500 (psychological level, static level) and 1.2470 (Fibonacci retracement level of 38.2%). On the upside, 1.2600 (psychological level, static level) is considered a temporary resistance level before 1.2640 (50-period Simple Moving Average (SMA) on the 4-hour chart) and 1.2700 (static level, psychological level). GBP/USD closed positively on Thursday but failed to attract additional buyers early on Friday. The last time the pair was seen below 1.2600, with market focus shifting to the US November labor market data. Improved risk sentiment led to a loss in the US Dollar (USD) on Thursday, helping GBP/USD record a small daily gain. On Friday, US stock index futures trading was mixed, suggesting investors should exercise caution. The US Bureau of Labor Statistics monthly employment report is expected to show an increase of 180,000 in Non-Farm Payrolls (NFP) in November. Earlier this week, US employment-related figures indicated loosening conditions in the labor market. A disappointing NFP print below 150,000 could reaffirm the labor market recovery and immediately pressure the USD. On the other hand, a strong NFP index above 200,000 could counter market expectations for the Federal Reserve's policy change starting in March and help the USD maintain its position by the end of the week. According to CME Group's FedWatch tool, markets are currently pricing in a nearly 60% chance that the Fed will cut interest rates to 25 basis points in March.
by Larissa-Trader
GBP/USD Holds Below 1.2600, Despite Modest Daily GainsGBP/USD rebounded to the 1.2600 level after hitting a two-week low around 1.2550 earlier in the day. The US Dollar struggled to find demand on Thursday amid increasing signs of loosening conditions in the US labor market ahead of Friday's employment report. The 1.2600 level (20-period Simple Moving Average - SMA) is considered immediate resistance for GBP/USD, followed by 1.2650 (static level, 50-period SMA), and 1.2700 (static level). On the flip side, strong support lies at 1.2560, marked by the 23.6% Fibonacci retracement level and the 100-period SMA. If GBP/USD drops below this level and utilizes it as resistance, the next downside targets could be 1.2500 (psychological level, static) and 1.2470 (38.2% Fibonacci retracement level). The interplay between these support and resistance levels will likely shape the near-term movements of GBP/USD as traders monitor key technical and fundamental factors.
by Larissa-Trader
GBP/USD Reverses Course Towards 1.2700 Before Weekly Close GBP/USD has extended its recovery from around 1.2600 and is approaching 1.2700 due to the weakened US Dollar. The greenback lost momentum following comments from Fed's Powell. The daily chart for the GBP/USD pair shows it trading around 1.2650 after reaching a peak of 1.2674 in the morning European session. The pair is performing well above its moving averages, with the 20-day Simple Moving Average aiming to cross the 100 and 200 SMAs, often a sign of strong buying pressure. Meanwhile, technical indicators are pulling back from overbought levels but lack downside strength, reflecting limited selling pressure. Looking ahead on the 4-hour chart, the risk seems to be diminishing. The flat 20-period SMA limits the upside around 1.2675, although the 100 SMA maintains a much gentler upward slope than the current level. Finally, technical indicators point southward, with the Momentum indicator dipping below the 100-level and the Relative Strength Index (RSI) holding at a neutral level. A more substantial decline could be anticipated if the exchange rate breaks below 1.2605, the immediate support level. Support levels: 1.2605, 1.2570, 1.2525 Resistance levels: 1.2680, 1.2730, 1.2780 GBP/USD is poised for a stronger stance on Friday, recovering from the Thursday low of 1.2603. Hawkish comments from Bank of England (BoE) officials have supported the British Pound. Monetary Policy Committee (MPC) member Megan Greene stated that monetary policy would need to remain restrictive for an extended period to achieve the central bank's 2% inflation target. Greene also expressed concerns about prolonged inflation. Additionally, BoE's Jonathan Haskel noted that low unemployment rates could keep interest rates elevated. On the data front, the UK released the Nationwide House Price Index, which increased by 0.2% compared to the previous month in November, surpassing expectations. S&P Global also published the final estimate of the Manufacturing PMI for November, adjusted upwards to 47.2 from the preliminary estimate of 46.7.
by Larissa-Trader
GBPUSD Reassesses Support Levels Amidst Building Bearish MomentuThe GBPUSD pair is currently contending with downward pressure as it approaches recent lows near 1.2603. This downward move has caused the currency pair to slide below the 200-hour moving average, standing at 1.26212. Sustaining positions below this moving average may continue to empower sellers. However, there's a noteworthy support zone ranging from 1.2589 to 1.2602. A decisive break below this range could amplify the bearish sentiment. Should this occur, the next significant target for traders would be the 38.2% retracement of the November trading range, situated at 1.25240. This level holds particular significance following the prominent downtrend observed in November; breaching this retracement level is crucial to confirm seller dominance. The next downward momentum could focus on the convergence of the 100 and 200-day moving averages around 1.2475. Conversely, if the support zone between 1.2589 and 1.2602 holds firm, and prices bounce back above the 200-hour moving average at 1.26212, it could provide assurance to buyers that the short-term low might have been established. In this scenario, the next bullish target would be the 100-hour moving average at 1.26714, offering potential for a reversal in the currency pair's direction.
by Larissa-Trader
GBPUSD is trending downGBP/USD has risen sharply over the past three weeks, logging solid gains that have coincided with a shift in favor of riskier currencies at the expense of the broader U.S. dollar. After recent price developments, cable is flirting with overhead resistance at 1.2720, defined by the 61.8% Fib retracement of the July/October selloff. If the bulls manage to clear this ceiling, a rally potentially exceeding 1.2800 might unfold. Conversely, if bullish impetus fades and sellers start to regain the upper hand, we may see a retrenchment towards 1.2590. GBP/USD could stabilize around this technical floor on a pullback before resuming its advance, but a break below the region could intensify bearish pressure, opening the door for a decline towards trendline support and the 200-day moving average slightly above 1.2460.
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by TinaTradingGold
1
GBPUSD Targeting Asia LiquidityThe price right now is in a bullish intermediate trend after the big sweep of liquidity occurred taking out the lows. What I am seeing that is making me bearish is the reaction from that extreme Supply Zone which means that the price did not want to go higher. Another bearish confluence is the presence of a Support created during Asia which is known to be a liquidity buildup for other sessions. There can be a mini bullish trend until that Supply zone will be reached. Inside that zone I will be waiting for a clear shift, and a Demand flip or Fail to minimize the risk of trading counter trend. This can be the start of a retracement on the 4h chart to mitigate the Demand Zones
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by raresmihalcea2020
GBPUSD has a downward trendGBP/USD has been on a bullish tear in November, rising nearly 4.5% since the beginning of the month. After Tuesday's gains, the pair has reached its best level since late August, but has been unable to reclaim the 61.8% Fibonacci retracement of the July/October slump (1.2720). If this ceiling holds, the upside momentum could run out of steam, paving the way for a drop towards 1.2590, followed by 1.2460. In the event of a clear break above 1.2720, sentiment on sterling is likely to improve, unleashing animal spirits that could propel a potential upward move towards 1.2850. On further strength, buying interest could accelerate, opening the door to a climb toward the 1.3000 handle. Although the bullish case for GBP/USD is strong, it is important to exercise caution as the pair is about to enter overbought territory
Short
by TinaTradingGold
GBP/USD Holds Above 1.2600 Amid Thin Trading ConditionsGBP/USD is trading near the 1.2600 level, sustaining its recovery post the mixed U.S. PMI data on Black Friday. The pair is strengthened by a weaker U.S. Dollar and robust UK PMI data released on Thursday. Thin trading conditions may amplify GBP/USD price action. The Relative Strength Index (RSI) on the 4-hour chart comfortably stays above 50 on Friday, and GBP/USD continues to trade above the 20-period Simple Moving Average (SMA), reflecting a short-term uptrend. The level at 1.2550 (static level) is marked as a pivot point. After confirming this level as support, GBP/USD could target 1.2600 (50% Fibonacci retracement level of the downtrend from July to October) and 1.2670 (static level from August). On the flip side, 1.2525 (upper limit of the ascending regression channel) may be considered the first support level, followed by 1.2500 (psychological level) and 1.2450 (static level).
by Larissa-Trader
GBP/USD Rises Near 1.2540 After Surging to 1.2575 on ThursdayThe GBP/USD exchange rate is trading closely around the 1.2540 level after experiencing a short-term surge to its highest point in 10 weeks, driven by an unexpected uptick in the UK Purchasing Managers' Index (PMI) data on Thursday. The pair spent the latter part of the trading day navigating through a significantly restricted market due to subdued Thanksgiving holiday activity in the US. The Relative Strength Index (RSI) on the 4-hour chart has maintained above 50, indicating that Wednesday's decline was a technical correction rather than the start of a reversal. However, GBP/USD continues to trade near the upper limit of the upward regression channel, and buyers may choose to exercise caution before betting on additional profits in the near future. On the upside, 1.2550 (static level) is considered the first resistance before 1.2600 (Fibonacci 50% retracement level from the July to October downtrend) and 1.2670 (static level from August). In the event of a retreat below 1.2500 (psychological level, upper limit of the upward regression channel), 1.2450 (50-period Simple Moving Average on the 4-hour chart, static level) could be viewed as the next support level before 1.2400 (psychological level, midpoint of the upward regression channel). GBP/USD dropped to 1.2450 in Wednesday's US trading session, closing in the negative territory, ending a three-day consecutive uptrend. Improved risk sentiment and optimistic UK PMI data helped the pair regain traction and stabilize above 1.2500 on Thursday. The US Dollar strengthened midweek as US Treasury bond yields recovered following weekly data that showed initial jobless claims dropping to the lowest since early October at 209,000. The UK's autumn statement did not elicit a significant market reaction as investors were already informed about the budget proposal details. Commenting on the potential impact of the planned tax cuts for the British Pound, analysts Ulrich Leuchtmann and Tatha Ghose of Commerzbank noted that "lower taxes and public spending might be welcomed by Labour Party voters due to the impacts on individuals, but I find it hard to believe that forex traders and/or a large portion of voters will buy into the Laffer curve," stating that the tax plans may not be interpreted as a positive factor for GBP in this case. Meanwhile, the S&P Global/CIPS Composite PMI in the UK improved to 50.1 in the preliminary estimate for November from 48.7 in October, providing a boost for the British Pound. This reading indicates private sector business activity has expanded beyond the contraction territory. Assessing the survey results, Dr. John Glen, CIPS Director, noted, "November data shows encouraging signs of calmer waters ahead for the UK economy, although there are still signs that we have a short way to go before fully weathering the inflationary storm." Additionally, Manufacturing PMI and Services PMI rose to 46.7 and 50.5, respectively. Market dynamics are expected to ease in the latter part of the day, with trading volumes tapering off on Thanksgiving Day in the US.
by Larissa-Trader
1
GBP/USD Rebounds to $1.2500 After Budget AnnouncementGBP/USD closed positively for the third consecutive trading day on Tuesday, reaching its highest level since early September at $1.2560. While experiencing a slight pullback on Wednesday, the pair remains above the $1.2500 mark. UK Chancellor of the Exchequer, Jeremy Hunt, is set to unveil the autumn budget report in the late session. Hunt is expected to announce significant tax cuts for businesses to stimulate economic growth, raise the national living wage, and increase the income of low-wage workers by around 10%. Assessing the impact of these measures on inflation and inflation expectations is challenging, but recent comments from Bank of England (BoE) officials suggest caution in dismissing additional tightening measures in the future. In the latter half of the day, U.S. economic data will reveal durable goods orders for October and weekly initial jobless claims. If the number of initial jobless claims continues to rise, the US Dollar (USD) may struggle to find demand. Investors will also closely monitor developments on Wall Street ahead of the Thanksgiving holiday. In the event that risk aversion prevails after the opening bell, the USD could weaken against its counterparts.
by Larissa-Trader
1
GBP/USD Holds Firm Above 1.2500 Amid BoE Comments GBP/USD saw an increase on Tuesday as the British Pound outperformed following hawkish comments from officials at the Bank of England. The currency pair is holding firm above the 1.2500 level despite the U.S. Dollar's adjustment. The level at 1.2550 (static level) is considered immediate resistance for GBP/USD, preceding 1.2600 (Fibonacci 50% retracement level from the July to October downtrend) and 1.2670 (static level from August). On the flip side, the initial support is at 1.2500 (psychological level, static level) before 1.2470, where the 38.2% Fibonacci retracement level, Simple Moving Average (SMA) 20, and the upper limit of the ascending regression channel intersect. Closing below this level may open up opportunities for a deeper correction towards 1.2400 (psychological level, static level). GBP/USD rose above 1.2500, reaching its highest point since early September, near 1.2550 on Tuesday. Comments from Bank of England (BoE) policymakers on policy outlook may influence the pair in the coming days. On Monday evening, BoE Governor Andrew Bailey stated they must monitor signs of persistent inflation that could warrant an interest rate hike. Bailey reiterated that such a policy would need to be constrained "for some time" and noted it's too early to contemplate rate cuts. Bailey and other members of the Monetary Policy Committee will testify before the Treasury Select Committee on Tuesday. If officials continue to convince the market that they don't necessarily need to raise interest rates, the British Pound may gather strength to resist its major counterparts. In U.S. trading sessions, economic data from the United States will reveal the Existing Home Sales figures for October, likely causing notable market reactions. The Federal Reserve (Fed) will release the meeting minutes from October 31 to November 1. Given the weak inflation data, prompting market speculation about the Fed's policy changes next year, comments in this release may already be outdated. Meanwhile, the UK's FTSE 100 index opened lower, last seen down 0.5%. Similarly, U.S. stock futures turned positive after a quiet Asian trading session. If safe-haven inflows return to the market in the latter half of the day, the U.S. Dollar may escape downward pressure, limiting GBP/USD's upward momentum.
by Larissa-Trader
1
GBP/USD Surges Amid Weakening USDThe GBP/USD pair garnered buying interest during the Asian trading session on Monday, reaching a three-day high around the 1.2470 region. Despite this, the spot price remains below the key resistance of the 100-day Simple Moving Average (SMA) near the psychological level of 1.2500 and the two-month high touched last week. The US Dollar (USD) struggles to register any meaningful recovery and remains near its lowest level since September 1, serving as a primary support factor for the GBP/USD pair. Reports on US CPI and PPI released last week indicated that the inflation nightmare has finally subsided. This allows the Federal Reserve (Fed) to maintain its stance in the December meeting, exerting downward pressure on the USD. Furthermore, markets are assessing the possibility of the Fed starting interest rate cuts in early 2024 and designing a soft landing for the economy. This has pushed the yield on the 10-year US government bond to its lowest in two months at 4.379% on Friday. Additionally, the overall positive trend in the Asian stock markets weakens the safe-haven appeal of the greenback, further supporting the GBP/USD pair. However, markets have set expectations for the Bank of England (BoE) to commence interest rate cuts from their 15-year highs amid looming economic recession risks. Betting odds have been reaffirmed by weaker UK retail sales figures, adding to a series of negative information from the previous week and aligning with the gloomy prospects of the UK economy. This may impede any further upward movement for the GBP/USD pair. Even from a technical standpoint, last week's rejection near the 1.2500 level or the 100-day SMA barrier suggests caution, prompting traders to wait for a strong buying surge before betting on new price hikes. In the absence of any relevant economic information from the UK or the US, USD price dynamics will continue to play a crucial role in influencing the GBP/USD pair, allowing traders to seize short-term opportunities.
by Larissa-Trader