- The GBP/USD encountered a brief pullback during Monday's trading session but quickly rebounded, showcasing signs of vitality.
- The market appears determined to sustain its upward trajectory, building upon the previous positive momentum.
- Last week, the pound surpassed the inverted hammer pattern's high, a strong long signal favored by many traders.
The 50-Day Exponential Moving Average lies below the current market level and is expected to provide crucial support. Given sufficient time, it is highly likely that the British pound will continue its ascent, particularly as the US dollar faces pressure in various currency pairs. It is important to note that Tuesday marks Independence Day in the United States, resulting in decreased market liquidity. Despite this temporary obstacle, the overall sentiment points towards continued upward pressure on the pound, leading to expectations of a higher market value by the end of the week.
The Market is Anticipated to Reach Higher Levels
The 50-Day EMA also acts as a dynamic support level, attracting attention from technical analysis followers. Many market participants will look for opportunities to buy the pound at what they perceive as attractive prices. While the timing of such opportunities remains uncertain, they are likely to arise in due course. Consequently, adopting a "buy on the dips" strategy seems appropriate as the market progresses. Given the pound's resilience and strong performance, shorting the currency holds little appeal, even during periods of US dollar strength. Therefore, waiting for suitable buying opportunities to build larger positions seems more favorable.
The British pound demonstrated resilience by rebounding from a brief pullback during Monday's trading session. The market's determination to continue its upward trajectory remains evident, with the pound surpassing the high of an inverted hammer pattern last week. The 50-Day EMA is expected to provide substantial support and is widely followed by technical analysts. Despite reduced liquidity on account of the US Independence Day holiday on Tuesday, the overall sentiment points toward continued upward pressure on the pound. As the week progresses, the market is anticipated to reach higher levels. A "buy on the dips" strategy appears suitable, given the pound's strong performance. Shorting the currency seems like it could be more attractive, even during periods of US dollar strength. Therefore, waiting for opportune moments to enter the market and accumulate positions on pullbacks is advisable.
Ready to trade our Forex daily forecast? We’ve shortlisted the best regulated forex brokers UK in the industry for you.