The GBP/USD surged again last week and put the currency pair within shouting distance of mid-December highs, and important long-term prices which may become targets for speculators.
The bullish trend of the GBP/USD has remained intact and traders pursuing upwards momentum has likely had their observations confirmed. Certainly, normal lower reversals have occurred in the GBP/USD too and it has not been a one-way street higher, but the results of Forex last week have created more optimism for speculators who favor buying the GBP/USD.
A high of nearly 1.24400 was touched on Wednesday; this value came within shouting distance of highs made in the middle of December when the GBP/USD was able to challenge the 1.24500 ratios. Traders who are looking at long-term charts have probably had their attention drawn toward GBP/USD price action in the first week of June 2022, when the currency pair was trading above the 1.25000 realms in a seemingly comfortable manner. Yes, the wheels certainly fell off of the GBP/USD as the summer got started and by the middle of June, the Forex pair was near the 1.19850 level.
Important Data Considerations on Schedule for GBP/USD this Week
On Tuesday of this week, the U.K. and U.S. will both publish Purchasing Manager Index statistics. These readings will give insight into the recessionary outlooks of managers in the manufacturing sectors. The reason this is important is that negative readings from the U.K and U.S. would put more pressure on the BoE and U.S. Federal Reserve to acknowledge fears about slowing economies.
- On Thursday of this week, the U.S. will release GDP numbers, and the growth numbers will be watched closely by central bank observers, the results will certainly affect the GBP/USD.
- Topping off the parade of data this coming week will be inflation numbers from the U.S. on Friday via the Core PCE Price Index. If the goods and services prices consumers are paying show signs of moderating inflation this would become a factor in the GBP/USD also.
Technical Move Higher Stumbled when Resistance was Challenged Last Week
Now that we have gotten the fundamental concerns for the GBP/USD out of the way for the coming week, technical resistance looks to have caused a reversal lower last week also. When the GBP/USD challenged the 1.24400 regions it certainly started to run into selling. Speculators who were targeting higher prices may have run into stop losses, while the reversal lower occurred taking the GBP/USD to the 1.23150 vicinities on Thursday. Intriguingly, however, support seems to have proven durable around this mark, and the ability of the GBP/USD not to trade below Friday the 13th’s lows may be interpreted as a bullish signal to the selling pressure which did develop briefly last week.
GBP/USD Weekly Outlook:
The speculative price range for GBP/USD is 1.22700 to 1.25900
Technically traders have reason to suspect the GBP/USD remains within a bullish trend. However, this doesn’t mean the currency pair can be bought blindly. Solid support levels are incrementally showing a rather stable base where conservative traders can initiate buying positions. But speculators who sell the GBP/USD do have the capability of taking advantage of the currency pair if it is perceived to have been overbought. However, sellers should be careful, because downturns are not likely to be long-term events.
This coming week the fundamental data which will be published is going to produce more opportunities for speculators. If the 1.23250 support level proves durable this would be another bullish sign for the GBP/USD, but a move to the 1.23150 would have to be considered still a potential spot for strong downturns. A move below the 1.23000 level might mean economic data this coming week has caused a nervous reaction in behavioral sentiment.
Traders who want to wager on upside price action cannot be faulted, but they should remain careful. Risk-taking tactics need to be used and not overly ambitious. The 1.24000 mark will certainly be a factor in the short term and if the ratio is broken higher and sustained it could set off another challenge to the 1.24400 and 1.24500 levels. If data from the U.K. and the U.S. proves good this week, speculators may find enough momentum to target higher ratios and surpass December’s highs and aim for the mark last seen in the first week of June 2022.