GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- GBP/USD facing resistance at $1.3188; bearish outlook persists.
- RSI at 39 indicates oversold conditions, signaling potential further downside.
- Short positions recommended below $1.31413, with target profit at $1.30520.
The GBP/USD pair is currently trading at $1.31052, inching up by a modest 0.01%. However, the technical landscape suggests a bearish bias in the short term.
Immediate price action remains capped below the pivot point at $1.3142, with resistance stacking higher at $1.3188, $1.3227, and $1.3266.
As market sentiment weakens, the pair is struggling to gain momentum, particularly with a Relative Strength Index (RSI) of 39, indicating oversold conditions that could signal a potential continuation of downward movement.
The 50-day Exponential Moving Average (EMA) at $1.3154 reinforces the notion that the pair is facing resistance from broader market pressures.
A failure to close above this level in recent sessions has further solidified a bearish outlook, leaving the door open for potential tests of lower support levels.
On the downside, immediate support stands at $1.3089, with further levels at $1.3052 and $1.3011 providing a stronger safety net for potential declines.
Should the pair breach the immediate support at $1.3089, a swift move toward $1.3052 is highly probable, with a potential extended drop toward $1.3011 if bearish momentum intensifies.
Given the technical setup, the recommended strategy is to consider short positions below the pivot point at $1.31413. The target for taking profit is at $1.30520, with a stop-loss placed above immediate resistance at $1.31878, to mitigate potential upside risk.
GBP/USD - Trade Ideas
Entry Price – Sell Below 1.31413
Take Profit – 1.30520
Stop Loss – 1.31878
Risk to Reward – 1: 1.9
Profit & Loss Per Standard Lot = +$893/ -$465
Profit & Loss Per Mini Lot = +$89/ -$46
GBP/USD Price Analysis – Sep 05, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair maintained its upward trend and performed strongly around 1.3168, reaching an intra-day high of 1.3172.
The British pound strengthened as the positive UK economic outlook boosted market expectations that the Bank of England's (BoE) policy-easing cycle might be shallower this year compared to other central banks.
Meanwhile, the US dollar weakened due to weaker-than-expected U.S. job data, which increased the likelihood of a significant interest rate cut by the Federal Reserve. This also supported the GBP/USD pair.
Looking ahead, traders are being careful as they wait for the important US Nonfarm Payrolls (NFP) report on Friday. Before that, they'll also pay attention to Thursday's US economic updates, including job reports from the ADP, Weekly Jobless Claims, and the ISM Services PMI.
GBP/USD Strengthens on Positive UK Economic Outlook and Fewer BoE Rate Cut Expectations
On the BoE front, the British Pound is gaining strength as the positive UK economic outlook suggests that the Bank of England’s (BoE) interest rate cuts may be less aggressive compared to other central banks.
The latest S&P Global/CIPS PMI data shows the UK economy grew at a faster pace in August, with both the manufacturing and services sectors expanding significantly. This marks the strongest growth since April, raising hopes for a more stable economic environment.
Financial markets now expect the BoE to cut interest rates just once this year. The central bank, which began shifting to a more neutral policy in August, is expected to keep rates steady at 5% this month, with a possible cut in November or December.
Meanwhile, the Pound's value will be influenced by market sentiment and speculation on rate cuts, especially as key UK economic reports are absent. Next week, investors will turn their attention to employment data for July and monthly GDP figures.
This news has boosted the GBP/USD pair, as expectations of fewer BoE rate cuts support the British Pound. Strong UK economic data strengthens the Pound, while market sentiment and upcoming employment and GDP reports could drive further movement.
GBP/USD Rises as Weak US Job Data Fuels Fed Rate Cut Expectations
On the US front, the broad-based US Dollar (USD) weakened as weak Job Openings data for July put pressure on the currency. The latest report showed that US job vacancies fell to 7.67 million, the lowest in over three-and-a-half years.
This signals a slowing job market, raising expectations that the Federal Reserve (Fed) may start cutting interest rates more aggressively. Market speculation now suggests a 41% chance that the Fed could reduce rates by 50 basis points in its September meeting, up from 34% a week ago.
Looking ahead, the US Nonfarm Payrolls (NFP) report for August, due on Friday, will be a key event that could impact the USD. In Thursday’s North American session, important data like the ADP Employment Change, ISM Services PMI, and Initial Jobless Claims will be in focus.
Therefore, this news has strengthened the GBP/USD pair, with the Pound rising above 1.3150 as the weaker US Dollar faces pressure from soft US job data. Increased expectations of Fed rate cuts further support the Pound's gains against the Dollar.
GBP/USD - Technical Analysis
The British Pound is facing downside pressure against the U.S. Dollar as it struggles below the key resistance level of $1.31673, which is reinforced by the 50-day Exponential Moving Average (EMA). GBP/USD has formed a lower high at $1.31880, signaling potential weakness.
The immediate support at $1.30891 is being closely watched, as a break below this level could trigger further downside towards $1.30523. The pair is currently in a consolidation phase, with the RSI at 45.15, which indicates there’s room for the price to slide lower before reaching oversold territory.
The descending trendline from previous highs continues to act as resistance near $1.31673, and any failure to break above this could attract sellers. A confirmed bearish break below $1.30891 might lead to a retest of the psychological level at $1.30111. Meanwhile, bulls should be cautious as any upside movement remains capped by resistance near the $1.31880 zone.
The pair remains bearish below the pivot point at $1.31517, with a possible downside target at $1.30891. A failure to hold above $1.31517 suggests potential weakness in the short term.
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GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- GBP/USD remains bearish below the $1.31673 resistance level.
- A break below $1.30891 could lead to further downside to $1.30523.
- RSI at 45.15 suggests additional selling pressure is likely.
The British Pound is facing downside pressure against the U.S. Dollar as it struggles below the key resistance level of $1.31673, which is reinforced by the 50-day Exponential Moving Average (EMA). GBP/USD has formed a lower high at $1.31880, signaling potential weakness. The immediate support at $1.30891 is being closely watched, as a break below this level could trigger further downside towards $1.30523. The pair is currently in a consolidation phase, with the RSI at 45.15, which indicates there’s room for the price to slide lower before reaching oversold territory.
The descending trendline from previous highs continues to act as resistance near $1.31673, and any failure to break above this could attract sellers. A confirmed bearish break below $1.30891 might lead to a retest of the psychological level at $1.30111. Meanwhile, bulls should be cautious as any upside movement remains capped by resistance near the $1.31880 zone.
The pair remains bearish below the pivot point at $1.31517, with a possible downside target at $1.30891. A failure to hold above $1.31517 suggests potential weakness in the short term.
GBP/USD - Trade Ideas
Entry Price – Sell Below 1.31517
Take Profit – 1.30891
Stop Loss – 1.31878
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$626/ -$361
Profit & Loss Per Mini Lot = +$62/ -$36
GBP/USD Price Analysis – Sep 04, 2024
Daily Price Outlook
During the European trading session, the GBP/USD pair remained subdued around the 1.3112 level as market sentiment weakened amidst rising uncertainty ahead of the release of the US Nonfarm Payrolls (NFP) data for August, due on Friday. Despite growing speculation that the Bank of England (BoE) will implement a shallower policy-easing cycle for the remainder of the year compared to other central banks, the British currency struggles to gain strength.
British Pound Weakens Despite Improving UK Economy and BoE Rate Cut Expectations
On the BoE front, the British Pound is struggling against major currencies. Despite speculation that the Bank of England (BoE) will ease its monetary policy only slightly for the rest of the year, the Pound remains weak.
Market expectations indicate the BoE might cut interest rates by 40 basis points (bps) this year. In comparison, the European Central Bank (ECB) is expected to cut rates by 65 bps, and the Federal Reserve (Fed) is projected to lower its rates by 100 bps.
Consequently, the UK economy is showing signs of improvement, with better-than-expected performance in manufacturing and services. The final S&P Global/CIPS Composite PMI for August was revised up to 53.8, surpassing the preliminary figure of 53.4.
This suggests that the UK economy is growing at its fastest pace since April. Despite this positive news, the Pound’s performance remains subdued, reflecting a cautious outlook on the BoE’s gradual approach to policy easing.
GBP/USD Pressured by US NFP Uncertainty and Fed Rate Cut Speculation
On the US front, the GBP/USD pair is struggling as market uncertainty grows ahead of the US Nonfarm Payrolls (NFP) data for August, due on Friday. S&P 500 futures have dropped further, showing decreased risk appetite among investors, while the US Dollar Index (DXY) slightly corrects to around 101.60.
The NFP report is crucial because it will influence expectations about the Federal Reserve's interest rate decisions in September. While the Fed is expected to adjust its policy this month, there's debate over whether it will cut rates significantly or take a more gradual approach.
If the NFP data shows a slowdown in job growth and higher unemployment, expectations for a 50 basis point (bps) rate cut by the Fed will likely rise. Fed Chair Jerome Powell has indicated support for the labor market if it worsens. Conversely, if the job data is steady or better than expected, hopes for a large rate cut may weaken.
Investors will also watch the US JOLTS Job Openings for July and the Fed’s Beige Book for more clues on the labor market, with job openings anticipated to decrease slightly from June.
Therefore, the uncertainty around the US NFP data and potential Federal Reserve rate cuts is likely to keep the GBP/USD pair under pressure. Weak job data could boost the Dollar due to expectations of aggressive Fed cuts, while strong data might weaken the Pound further.
GBP/USD - Technical Analysis
The GBP/USD pair is trading at $1.31136, with a modest gain of 0.01%. Currently, the pair is hovering near a crucial pivot point at $1.31620, signaling potential indecision in the market.
The 50-day Exponential Moving Average (EMA) rests at $1.31695, just above the current price level, reinforcing the significance of the resistance at $1.31880. A break above this resistance could open the door for gains toward $1.32269, but for now, the downside appears to dominate the outlook.
The Relative Strength Index (RSI) is at 39, suggesting that bearish momentum is gaining strength, but it is not yet in oversold territory. If the pair breaks below the immediate support at $1.31218, we could see a test of lower levels, with the next support sitting at $1.30784. Further declines may push GBP/USD toward $1.30410 and $1.30111, which will be key areas for bulls to defend.
For today, the key battle lies around the $1.31620 pivot. A failure to break this level would likely result in a bearish continuation, with selling pressure intensifying if $1.31218 is breached. On the upside, a break above $1.31880 could trigger a bullish reversal, but the pair remains constrained by the broader downward trend.
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GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- GBP/USD hovers near a critical pivot point of $1.31620, leaning towards the bearish side.
- RSI at 39 suggests rising bearish momentum, but there is room before oversold conditions.
- A break below $1.31218 could drive the pair lower toward $1.30410, with support levels in focus.
The GBP/USD pair is trading at $1.31136, with a modest gain of 0.01%. Currently, the pair is hovering near a crucial pivot point at $1.31620, signaling potential indecision in the market.
The 50-day Exponential Moving Average (EMA) rests at $1.31695, just above the current price level, reinforcing the significance of the resistance at $1.31880. A break above this resistance could open the door for gains toward $1.32269, but for now, the downside appears to dominate the outlook.
The Relative Strength Index (RSI) is at 39, suggesting that bearish momentum is gaining strength, but it is not yet in oversold territory. If the pair breaks below the immediate support at $1.31218, we could see a test of lower levels, with the next support sitting at $1.30784. Further declines may push GBP/USD toward $1.30410 and $1.30111, which will be key areas for bulls to defend.
For today, the key battle lies around the $1.31620 pivot. A failure to break this level would likely result in a bearish continuation, with selling pressure intensifying if $1.31218 is breached. On the upside, a break above $1.31880 could trigger a bullish reversal, but the pair remains constrained by the broader downward trend.
GBP/USD - Trade Ideas
Entry Price – Sell Below 1.31218
Take Profit – 1.30649
Stop Loss – 1.31504
Risk to Reward – 1: 1.9
Profit & Loss Per Standard Lot = +$569/ -$286
Profit & Loss Per Mini Lot = +$56/ -$28
GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bearish Bias: GBP/USD is under pressure below the $1.3156 pivot, with the RSI at 40 indicating further downside risk.
- Resistance Levels: Immediate resistance is seen at $1.3188, with additional targets at $1.3227 and $1.3265.
- Support Levels: Key support is found at $1.3119, followed by $1.3078 and $1.3041.
The GBP/USD pair is currently trading at $1.31347, showing a slight uptick of 0.02% in early trading.
The currency pair is hovering just below the pivotal $1.3156 level, which serves as a crucial point in determining the next directional move.
The 4-hour chart indicates that the pair faces immediate resistance at $1.3188, which aligns closely with the 50-day Exponential Moving Average (EMA).
A break above this level could push the pair towards the next resistance levels at $1.3227 and $1.3265.
On the downside, GBP/USD finds immediate support at $1.3119, with further support levels at $1.3078 and $1.3041.
The Relative Strength Index (RSI) is currently at 40, signaling that the pair is leaning towards a bearish trend, but is not yet in oversold territory.
This suggests that there could be more room for downside movement if the pair fails to hold above the key pivot point at $1.3156.
Given the current technical setup, traders might consider short positions below $1.3156, with a potential target around $1.3111.
Conversely, a break above $1.3188 would likely invalidate this bearish outlook, potentially setting the stage for a rally towards the $1.3227 level and beyond.
GBP/USD - Trade Ideas
Entry Price – Sell Below 1.31556
Take Profit – 1.31111
Stop Loss – 1.31865
Risk to Reward – 1: 1.4
Profit & Loss Per Standard Lot = +$445/ -$309
Profit & Loss Per Mini Lot = +$44/ -$30
GBP/USD Price Analysis – Sep 02, 2024
Daily Price Outlook
During the early European trading session, the GBP/USD currency pair reversed its downward trend and turned bullish at around the 1.3135 level, reaching an intra-day high of 1.3146.
This upward movement is largely attributed to renewed selling pressure on the US dollar. The USD is under pressure due to increased market optimism and growing expectations of a dovish stance from the US Federal Reserve (Fed).
Meanwhile, the Bank of England (BoE) is anticipated to gradually lower interest rates later this year, which could support the Pound Sterling (GBP).
Investors are now focusing on upcoming economic data, including the US ISM Manufacturing PMI on Tuesday and the Nonfarm Payrolls report on Friday. These reports will be key for traders looking to gauge potential market impacts.
Impact of Fed Rate Cut Expectations and PCE Data on GBP/USD Pair
On the US front, the US dollar is facing renewed bearish pressure due to growing market optimism and increasing expectations that the Federal Reserve (Fed) might adopt a more dovish stance.
According to the CME FedWatch Tool, there is a 70% chance that the Fed will cut rates by at least 25 basis points at its September meeting.
However, the recent economic reports have led traders to rethink the likelihood of a significant rate cut by the Fed in September.
On the data front, July's Personal Consumption Expenditures (PCE) Index data showed a 2.5% increase year-over-year, matching the previous month’s reading but falling short of the 2.6% forecast.
Additionally, the core PCE Index, which excludes food and energy, rose by 2.6% year-over-year in July, consistent with the prior figure but slightly below the expected 2.7%.
These figures suggest that while inflation remains steady, it may not be weak enough to prompt a more aggressive rate cut by the Fed.
Therefore, the bearish US dollar and mixed PCE data could support the GBP/USD pair. However, the weaker dollar and uncertainty around aggressive Fed rate cuts might boost the GBP, leading to potential gains for the GBP/USD pair.
BoE's Gradual Rate Cuts Support GBP/USD Amid Cautious Approach
Another factor that has been boosting the GBP/USD pair is the Bank of England's (BoE) plan to gradually lower interest rates for the rest of the year.
This move is expected to support the Pound Sterling (GBP) and help it maintain its position in the market.
At the recent Jackson Hole Symposium, BoE Governor Andrew Bailey mentioned that the impact of inflationary pressures would be less severe than previously thought.
However, Bailey also cautioned against rushing into further rate cuts too quickly. This balanced approach aims to stabilize the GBP while managing inflation concerns.
According to Reuters, the BoE is taking a careful approach to ensure that any changes in interest rates are well-measured and do not negatively affect the economy.
GBP/USD - Technical Analysis
The GBP/USD pair is currently trading at $1.31347, showing a slight uptick of 0.02% in early trading. The currency pair is hovering just below the pivotal $1.3156 level, which serves as a crucial point in determining the next directional move.
The 4-hour chart indicates that the pair faces immediate resistance at $1.3188, which aligns closely with the 50-day Exponential Moving Average (EMA). A break above this level could push the pair towards the next resistance levels at $1.3227 and $1.3265.
On the downside, GBP/USD finds immediate support at $1.3119, with further support levels at $1.3078 and $1.3041.
The Relative Strength Index (RSI) is currently at 40, signaling that the pair is leaning towards a bearish trend, but is not yet in oversold territory. This suggests that there could be more room for downside movement if the pair fails to hold above the key pivot point at $1.3156.
Given the current technical setup, traders might consider short positions below $1.3156, with a potential target around $1.3111.
Conversely, a break above $1.3188 would likely invalidate this bearish outlook, potentially setting the stage for a rally towards the $1.3227 level and beyond.
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GBP/USD Price Analysis – Aug 28, 2024
Daily Price Outlook
Despite expectations that the Bank of England (BoE) will cut interest rates more slowly than other central banks, the GBP/USD currency pair continued its losing streak, trading around 1.3218 and hitting an intra-day low of 1.3214.
This decline is largely due to the US Dollar recovering some ground, with investors focusing on the upcoming US core Personal Consumption Expenditure (PCE) Price Index data for July, scheduled for release on Friday.
Although the US Dollar has recently gained, its near-term outlook remains bearish as investors anticipate the Federal Reserve will reduce interest rates in its September meeting.
Conversely, the GBP/USD pair might trade sideways as investors await more clarity on the Bank of England’s future rate decisions.
The recent 25 basis points rate cut to 5% indicates a shift from a restrictive policy stance, reflecting confidence in achieving the 2% inflation target.
Impact of US Economic Data and Federal Reserve Expectations on GBP/USD
On the US front, the GBP/USD pair has fallen as the US Dollar regains strength. Investors are awaiting the core Personal Consumption Expenditure (PCE) data for July, due for release on Friday, which could have a notable impact on the pair.
The US Dollar Index (DXY) has attracted buying interest after reaching a new year-to-date low of 100.50.
Despite this recovery, the short-term outlook for the US Dollar remains uncertain as investors are anticipating a Federal Reserve rate cut in September, but opinions differ on the magnitude.
However, the CME FedWatch tool indicates a 34.5% chance of a 50-basis point cut, while most expect a 25-basis point reduction.
Economists forecast a slight increase in core PCE inflation to 2.7%, which could impact the Fed's decision and influence market speculation regarding future rate cuts.
Impact of BoE's Rate Decisions and Economic Outlook on GBP/USD
On the BoE front, the Pound Sterling is showing mixed performance against major currencies as investors await new information about interest rates.
The BoE recently cut rates by 25 basis points to 5%, ending a long period of high rates, and is confident it can bring inflation down to its 2% target.
The expectation is that the BoE will reduce rates more slowly than other central banks because the UK economy remains strong, supported by recent positive economic data.
Investors are looking for more guidance from BoE policymaker Catherine Mann’s upcoming speech at 12:15 GMT.
Mann had previously voted to keep rates steady at 5.25%, and her comments may provide insights into future rate cuts and inflation expectations.
Additionally, UK Prime Minister Keir Starmer’s remarks about a tighter fiscal budget, aiming for long-term benefits despite short-term tax increases, have bolstered the Pound’s appeal.
Therefore, the mixed performance of the GBP/USD pair reflects uncertainty as investors await further guidance on interest rates.
The BoE’s slower rate cuts and positive economic data may support the Pound, while upcoming comments from BoE policymaker Mann and fiscal budget details will also influence GBP/USD.
GBP/USD - Technical Analysis
The British Pound (GBP/USD) is currently trading at $1.32197, down 0.11% as the pair consolidates within a tight range on the 4-hour chart.
The pair is exhibiting some signs of resilience despite the modest pullback, with the price hovering near the immediate support level at $1.3149.
This level has proven to be a key short-term support and could be crucial in determining the next directional move.
On the upside, immediate resistance is seen at $1.3265, closely aligned with the pivot point at $1.3263. A break above this resistance could open the door for further gains towards the next resistance levels at $1.3299 and $1.3333.
These levels have acted as barriers in recent sessions, and overcoming them could signify a stronger bullish trend.
The Relative Strength Index (RSI) stands at 63, indicating that the market is still in a bullish phase but approaching overbought territory.
This suggests that while there is room for further upside, traders should be cautious of a potential pullback.
The 50-day Exponential Moving Average (EMA) at $1.3086 is currently providing strong support, reinforcing the overall uptrend.
Given the current setup, a buy limit order at $1.31920 could offer a favorable risk-reward ratio. The target would be the pivot point at $1.3263, with a stop loss at $1.31578 to protect against downside risks.
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GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Immediate Support: GBP/USD finds key support at $1.3149, with the 50-day EMA at $1.3086 providing additional backing.
- Resistance Levels: A break above $1.3265 could lead to gains toward $1.3299 and $1.3333.
- Technical Indicators: RSI at 63 suggests a bullish market, but the pair is nearing overbought conditions.
The British Pound (GBP/USD) is currently trading at $1.32197, down 0.11% as the pair consolidates within a tight range on the 4-hour chart.
The pair is exhibiting some signs of resilience despite the modest pullback, with the price hovering near the immediate support level at $1.3149.
This level has proven to be a key short-term support and could be crucial in determining the next directional move.
On the upside, immediate resistance is seen at $1.3265, closely aligned with the pivot point at $1.3263. A break above this resistance could open the door for further gains towards the next resistance levels at $1.3299 and $1.3333.
These levels have acted as barriers in recent sessions, and overcoming them could signify a stronger bullish trend.
The Relative Strength Index (RSI) stands at 63, indicating that the market is still in a bullish phase but approaching overbought territory.
This suggests that while there is room for further upside, traders should be cautious of a potential pullback.
The 50-day Exponential Moving Average (EMA) at $1.3086 is currently providing strong support, reinforcing the overall uptrend.
Given the current setup, a buy limit order at $1.31920 could offer a favorable risk-reward ratio. The target would be the pivot point at $1.3263, with a stop loss at $1.31578 to protect against downside risks.
GBP/USD - Trade Ideas
Entry Price – Buy Limit 1.31920
Take Profit – 1.32630
Stop Loss – 1.31578
Risk to Reward – 1: 2
Profit & Loss Per Standard Lot = +$710/ -$342
Profit & Loss Per Mini Lot = +$71/ -$34
GBP/USD Price Analysis – Aug 26, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair maintained its upward trend and remained well bid around the 1.3225 level.
This bullish momentum is primarily driven by dovish comments from Federal Reserve (Fed) Chair Jerome Powell regarding interest rates. These remarks undermine the US dollar and contribute to the GBP/USD pair’s gains.
Powell's comments at the Jackson Hole Symposium suggest that the Fed is considering rate cuts, reflecting concerns over the US labor market's downside risks.
Fed Rate Cut Expectations and Economic Data Impact on GBP/USD
Jerome Powell, the Fed Chair, hinted that the central bank might cut interest rates to support the labor market and keep inflation around 2%.
However, he didn’t specify when these cuts might occur, stating that the decision will depend on future economic data.
This lack of clear guidance has weakened the US dollar. As a result, the Pound Sterling (GBP) has strengthened against the US Dollar (USD), pushing the GBP/USD exchange rate higher.
In simple terms, the uncertainty about the Fed’s next moves has made the USD less valuable, benefiting the GBP.
On the US front, the US Dollar Index (DXY), which measures the USD against six major currencies, recently hit a new year-to-date low of 100.53.
Investors are awaiting crucial economic data this week, including the July core Personal Consumption Expenditure (PCE) Price Index and Durable Goods Orders.
These releases will be pivotal in shaping expectations for Fed policy and, consequently, influencing the GBP/USD movement.
Bank of England’s Cautious Approach Bolsters Pound Amid Rate Cut Speculation
On the BoE front, the Pound Sterling is performing well against its major peers at the start of the week.
The British currency is gaining strength because the Bank of England (BoE) is cautious about planning rate cuts too soon, given that inflation in the UK is still a concern.
BoE Governor Andrew Bailey indicated at the Jackson Hole Symposium that while inflation pressures may be less severe than expected, the BoE should not rush to cut interest rates. He emphasized the need to be careful not to lower rates too quickly or too much.
This week, market speculation about future BoE rate cuts will guide the Pound Sterling, as there is no major economic data expected from the UK.
Currently, traders anticipate one more rate cut from the BoE this year. Although the BoE did cut rates on August 1, recent positive economic data, like the stronger-than-expected flash S&P Global/CIPS PMI for August, has lessened the likelihood of another rate cut in September.
GBP/USD - Technical Analysis
The British Pound (GBP) is currently trading at $1.31995 against the US Dollar (USD), reflecting a slight decline of 0.14% in today’s session.
On the 4-hour chart, GBP/USD is flirting with the critical pivot point at $1.3220, which has been a key level of interest for traders.
The currency pair’s recent price action suggests that the market is at a crossroads, with potential for both upward and downward movement depending on how it interacts with this pivot.
The Relative Strength Index (RSI) is hovering around 73, indicating that the pair is nearing overbought territory.
This elevated RSI suggests that the upward momentum may be losing steam, making it increasingly likely that we could see a pullback.
However, as long as GBP/USD stays above the 50-day Exponential Moving Average (EMA), currently positioned at $1.3092, the broader uptrend remains intact.
Resistance levels to watch include $1.3255 as the immediate barrier, followed by $1.3299 and $1.3340. A break above these levels could reinvigorate the bullish trend, pushing the pair toward new highs.
On the downside, immediate support is found at $1.3165, with further support at $1.3121 and $1.3078.
A breach of $1.3165 could trigger a more pronounced sell-off, potentially bringing the pair back down to test the lower support levels.
Conclusion: The market remains cautiously optimistic but is showing signs of overextension.
Traders might consider selling below the $1.3220 pivot point, aiming for a take profit around $1.3165 and setting a stop loss near $1.3255. Keep an eye on the RSI and the 50 EMA for any shifts in momentum.
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