The GBP/USD is trading within sight of the 1.13000 mark as of this morning. Having produced a swirl of quick hitting value changes more like an emerging market currency pair the past month and a half, the GBP/USD may find it has a chance to settle down, that is if the U.K government can stop producing surprises which financial institutions find rather unsettling.
Another change to the U.K government leadership has struck, but the change of Prime Minister was expected after Liz Truss found her decisions causing mayhem. The turbulence caused by the change to fiscal and monetary policies over the past month have rocked the GBP/USD, but perhaps the ability to produce a well thought out plan to the public will be better received this time around. The GBP/USD has produced some upwards momentum since its ‘fall’ to around the 1.10710 mark on Friday.
Long Term Bearish Trend May Loosen its Grip in the Mid-Term
Technically the GBP/USD is still within the lower part of its long-term price range certainly. And while it may be true that the grip of the bearish controlled market may soften, the GBP/USD is likely to have further surprises delivered because of political news coming from the U.K due to an inability to present a stable government.
- The GBP/USD 1.13000 mark may be looked at as an important short-term ratio for behavioral sentiment.
- If the GBP/USD can climb above the 1.13000 mark and sustain price action with some upward momentum this may be viewed as a positive sign by financial houses and bullish speculators.
Historic Lows of the GBP/USD are still in Plain Sight and Perhaps Attractive to Traders
The volatile trading within the GBP/USD the past handful of weeks due to fundamental chaos caused by the U.K government mess may find a more polite landscape in the coming days and week. What financial houses and speculators seek is clarity, and the ability to forecast a more positive political landscape may lead to a better path for the GBP/USD to recover some of its lost value. Economically many questions remain regarding the U.K, but the GBP/USD is perceived as being cheap in many eyes.
Speculators who believe the GBP/USD has room to incrementally start moving higher cannot be blamed. Yes, there will be other days of stormy political debate and infighting in the U.K government, but it is hard to believe there will be a repeat of the nervous conditions seen the past handful of weeks.
A wager on upside with the GBP/USD from a technical and fundamental viewpoint does look like a potential worthwhile endeavor. Traders should keep their expectations realistic and be willing to cash in profits if they are produced, because reversals are part of the natural trading environment.
GBP/USD Short Term Outlook:
Current Resistance: 1.13100
Current Support: 1.12870
High Target: 1.13910
Low Target: 1.12640
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