The GBP/USD was able to turn in another bullish week of results, but after achieving highs not seen in almost ten months a slight reversal lower did take place.
The GBP/USD went into this holiday weekend near the 1.24110 level, after coming off a high around the 1.25275 mark which was demonstrated on the 4th of April. The last time the GBP/USD touched this higher value was in early June of 2022. The finish to the week of trading for the GBP/USD certainly did not see the currency pair’s bullish trend end strongly, but the week’s results continued to display the technical notion that Forex pair is climbing upwards when mid-term charts are considered.
Day traders who remained stubbornly active on Thursday and Friday of last week should have noticed that volumes within GBP/USD transactions were dropping because of the approaching holiday. The U.S Non-Farm Employment Change statistics and Average Hourly Earnings data published this past Friday came in near expectations. However, as the weekend neared the GBP/USD did sink from a 1.24300 vicinity to below the 1.23900 momentarily as volatility came into the market. The slight move higher with a finish above the 1.24100 level may be interpreted as positive by some optimistic GBP/USD traders with a bullish sentiment.
- Monday’s trading as GBP/USD trading opens is likely to remain thin with many financial houses remaining closed because of the long Easter holiday.
- Important U.S inflation data will be released this Wednesday and Thursday via the Consumer Price Index and Producer Price Index numbers respectively. Retail Sales statistics will be reported on Friday from the States.
- This Thursday will also see GDP numbers from the U.K, which will provide insights regarding growth (or recession) depending on the outcome.
While the U.S. and U.K. data will certainly be important, the return of full volume to the GBP/USD forex market will be instrumental for traders. Having produced a rather solid bullish climb upward the past month, the GBP/USD now is traversing within values near January and December’s optimistic highs and within sight of marks last seen in June of 2022. Trading conditions may remain rather unsettling on Monday with light volume persisting, thus day traders should be wary of choppy conditions. However, Tuesday will see a return of many traders and they will likely begin to position portfolios for the inflation data to come from the U.S. on Wednesday and Thursday.
The speculative price range for GBP/USD is 1.23610 to 1.25910
Behavioral sentiment remains a key within the GBP/USD and support levels should be monitored, particularly in what can be perceived as a bullish trading environment for the currency pair. Downside risks certainly exist and traders do need to be careful, but the belief that support around the 1.24000 to 1.23800 marks can prove durability may remain technically.
As always day traders will need to remain careful regarding their use of risk management. If the 1.24000 level fails to hold back selling it will be important to gauge where support will stiffen and that GBP/USD traders may want to speculate on an upside reversal taking place. However, until U.S inflation data is published traders must consider the pursuit of the GBP/USD to be rather dangerous. Because if inflation shows that it is stronger than expected the GBP/USD could sink further.
The upside momentum of the GBP/USD the past month remains intriguing. Sentiment appears to indicate many financial houses remain bullish regarding their outlook of the GBP/USD. If U.S CPI and PPI numbers published this coming Wednesday and Thursday come in weaker than anticipated, this could certainly help the GBP/USD gain.
Yet, if inflation numbers from the U.S. meet expectations or come in stronger, then some bearishness may be seen. The ability to climb above the 1.25000 momentarily last week may prove intriguing for buyers, but they should remain realistic and keep their take profits within a conservative mode until the inflation reports are published. Weaker inflation results from the U.S. would help the GBP/USD climb higher, but there are no guarantees regarding the government reports.