- Over the last day, a repetition of the preceding 24 hours' activity has unfolded in the GBP/USD market.
- Notably, both PMI indicators unexpectedly descended into negative territory on Wednesday.
- This shift has prompted a noticeable alteration in investor sentiment, favoring the US dollar as a haven. However, it's vital to recognize that the United States' PMI data is yet to be released. Should these figures mirror the somber outlook, the current dynamics could undergo a complete reversal.
The present scenario places the market in a pivotal position between two crucial technical benchmarks: the 50-day Exponential Moving Average (EMA) and the 200-day EMA. This setup inherently ushers in market volatility and turbulence. Consequently, this market continues to exhibit discernible fluctuations, a pattern that seems destined to persist, especially in anticipation of the imminent Jackson Hole Symposium speech scheduled for Thursday. This forthcoming discourse, delivered by Jerome Powell, the Chair of the Federal Reserve, wields significant influence over market trajectory. While a hawkish stance from Powell might bolster the US dollar, skepticism remains pervasive among market observers. This hesitancy contributes to an overarching sentiment characterized by cautious restraint.
Considering all aspects, the market seems to have adopted a holding pattern, even following a substantial sell-off witnessed early in Thursday's session. This stance is fortified by a robust uptrend line, functioning as a steadfast foundational support. Consequently, the resilience displayed by this support implies that breaching this market's defenses would necessitate a substantial effort. Should the market descend beneath the 200-Day EMA, it could conceivably trigger an extended downward trajectory. Such a development may lead to a noteworthy shift in favor of the US dollar, impacting not solely the British pound, but also reverberating across various currency pairs.
The Pair is Currently Consolidating
In essence, our evaluation of this scenario hinges on discerning whether it presents an opportunity founded on value or signals an impending market breakdown. The days that lie ahead are poised to provide valuable insights into this pivotal question. Nevertheless, it remains reasonable to anticipate that uncertainties will persist as we navigate the concluding days of the week – and beyond.
Potential signal: The GBP/USD pair is currently consolidating, waiting for Powell to speak in Wyoming. The prevailing trend is still higher, but at this point, it looks threatened. This COULD be a trend change just waiting to happen, or it could be a continuation play.
Long: On a move above 1.28, a stop loss for a long position at 1.37 makes sense. The target would be 1.3012 above.
Short: On a DAILY CLOSE below 1.26, and AFTER THE SPEECH, I will sell this market, with a stoploss at 1.28, target is 1.2375 below.
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