The GBP/USD went into the weekend near the 1.25855 level and within sight of lows made earlier in the week around the 1.25600 ratio on Tuesday of last week. The GBP/USD did reach a high of nearly 1.27485 on Wednesday, and held its value higher on Thursday but started to stumble on Friday again. U.S. jobs data was published on Friday and actually came in what could be perceived as ‘favorably’ to create weaker USD price action, but that did not happen.
Behavioral sentiment seemingly remains high in the financial markets and the GBP/USD has been sold off in the wake. The choppy conditions seen last week however were expected, and trading in the coming days will likely provide more nervousness.
The GBP/USD is within sight of intriguing support levels and this may prove tempting for speculators with a taste for excitement. Not only did the GBP/USD close near its weekly low, but it is not much higher than its monthly low which took place on Friday the 25th of August when the currency pair challenged the 1.25500 level.
Speculative Wagers and Thoughts of the GBP/USD Being Oversold
Traders who want to wager on the GBP/USD being oversold should not get too aggressive quite yet. The nervous sentiment that has lingered in Forex and the broad financial markets since the second week of July is still shadowing. The GBP/USD remains above values seen in May and early June of this year, but support should be watched closely around the 1.25450 level.
Traders in the next couple of days need to remember tomorrow is a banking holiday in the U.S. and Forex markets will be relatively quiet. With major U.S financial houses gone for a long holiday, this could open the door for more nervous trading in the GBP/USD tomorrow, support levels will need to prove durable for bullish sentiment to build.
However, tomorrow’s trading may not look anything like the trading that develops on Tuesday. Speculators need to be prepared for the potential of additional volatility hitting in the middle of this week, particularly as financial institutions brace for what may be changing outlooks based on lackluster U.S data which has been seen the past couple of weeks.
Relatively Light Data this week so Traders will Rely upon Behavioral Sentiment
- As traders return from the long holiday weekend in the U.S., they will rely upon their perceptions regarding what is to come without major economic data coming from the UK or States this week.
- Support levels may prove important tomorrow because the GBP/USD is within sight of last week’s low. If the 1.25800 to 1.25750 levels can be maintained, this may be interpreted as a buying signal.
GBP/USD Weekly Outlook:
The speculative price range for GBP/USD is 1.24860 to 1.27340
Trading the past week in the GBP/USD certainly produced the nervous results that were expected. The range in the GBP/USD while testing highs in the middle of the week, stumbled again. Because of the U.S. banking holiday tomorrow, the GBP/USD may produce rather suspicious results again tomorrow. Volumes will certainly be lighter than normal tomorrow, but Tuesday’s trading could produce price velocity as financial institutions fully engage and pursue their positions.
While speculators may look at the GBP/USD and perceive that it has been vastly oversold, Forex conditions remain nervous and the USD has produced strength in a rather aggressive manner against many major currencies. Traders looking for upside price movement to develop should remain patient and not get overly ambitious regarding bets they make looking for upside.
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