GBPUSD | Perspective for the new week | Follow-up

darcsherry Updated   
OANDA:GBPUSD   British Pound / U.S. Dollar
In this video, we delve into the recent movements of the Pound Sterling against the US Dollar as the GBP/USD pair hits a temporary pause near the key resistance level of 1.2700. Investors are closely watching the upcoming release of the United Kingdom's Consumer Price Index (CPI) data for April, which is expected to provide crucial insights into the interest rate outlook.

With the Bank of England (BoE) potentially considering rate adjustments in the near future, the market sentiment has turned slightly cautious. BoE Governor Andrew Bailey's remarks following the March CPI data release hint at a potential decline in inflation figures, impacting the Pound Sterling's trajectory.

On the other side of the Atlantic, Federal Reserve (Fed) policymakers have been pushing back on market expectations for rate cuts, despite the decline in US inflation data. The Fed's stance on maintaining higher interest rates for a longer period has led to a rebound in the US Dollar.

Moreover, concerns over the strength of the US labor market have deepened following higher-than-expected Initial Jobless Claims data, adding another layer of complexity to the market dynamics.

GBPUSD Technical Analysis:
Will the pound hold below $1.27000? Watch this video for key trades this week. We analyze trends and levels for market insights. Join the discussion for updates on GBP/USD trading. Stay tuned for more content. Happy trading!

Disclaimer Notice:
Trading in the foreign exchange market and other instruments carries high risk and may not be suitable for all investors. The content provided here is for educational purposes only. Evaluate your financial situation and consult with a financial advisor before making any investment decisions. Past performance is not indicative of future results.
After testing the 1.27000 level last week, buyers appear to be encountering resistance, leading to a consolidation phase at the startof the new week’s trading activity. This range-bound structure could be due to the anticipation of the UK's Consumer Price Index (CPI) data, which will be released mid-week.

Market participants are expecting a 60 basis point interest rate cut by the Bank of England (BoE) in 2024, with the initial cut likely in August. The upcoming UK CPI data for April, scheduled for release on Wednesday, is forecasted to show an annual increase of 2.7%. This data is expected to have a significant impact on the Pound Sterling (GBP).

In the interim, until the CPI data is published, our trading activities will be guided by the current levels identified on the 1H timeframe.

Good Morning.

Trade active:
The buy position initiated yesterday remains active as GBP/USD maintains slight gains above the 1.27000 zone. Market participants are eagerly awaiting fresh catalysts, particularly speeches from various Federal Reserve (Fed) officials scheduled for later today.

The subdued or indecisive price movement observed in the past 24 hours could be attributed to the anticipation surrounding the release of the UK Consumer Price Index (CPI) inflation data and the Federal Open Market Committee (FOMC) Minutes scheduled for Wednesday. BoE Governor Andrew Bailey emphasized the bank's data-driven approach, particularly focusing on indicators such as UK wage growth and consumer price inflation.

A softer CPI reading could fuel expectations of rate cuts, potentially exerting downward pressure on the Pound Sterling (GBP).

Given the absence of significant economic releases from both the US and the UK today, we will rely on the levels identified on the chart to navigate today's trading activity.

Good Morning

Trade active:


Trade active:
After experiencing a loss in yesterday's session, the Pound Sterling has gained significant traction against the US Dollar in early trading today, the market's immediate reaction to the release of UK Consumer Price Index (CPI) data. The data revealed that the UK Consumer Price Index rose 0.3% MoM in April, down from a 0.6% acceleration in March beating market expectation of 0.2%.

The unexpected decline in inflation may heighten expectations of a potential interest-rate cut by the Bank of England (BoE) in June, intensifying volatility in the Pound Sterling.

Given these developments, it is prudent to secure the two buy positions in anticipation of new trading opportunities. We will delve into the current market dynamics extensively during our live session today.

Good Morning.

Trade active:

Secure the buy position now as selling pressure resumes

Trade active:
Another buy position has been executed as GBP/USD strives to regain lost ground. The US Dollar's struggle to extend its gains offers support to the pair amidst an improving market sentiment.

GBP/USD maintains its strength as traders scale back expectations of the Bank of England (BoE) transitioning towards policy normalization in the June meeting, following over two years of hawkish interest rate outlook.

Anticipations of BoE rate reductions in June have waned after April's Consumer Price Index (CPI) report revealed a slower-than-expected softening of inflation. This may bolster the Pound Sterling against the US Dollar, with investors now anticipating a delay in BoE rate cuts due to the sluggish decline in UK inflation.

The CPI report indicates annual headline and core inflation rates declining to 2.3% and 3.9% respectively. Notably, the service price index, which plays a crucial role in dashing hopes of BoE rate cuts, modestly decreased to 5.9% from the previous reading of 6.0%. The persistent service inflation in the UK remains a key obstacle in disinflation progress, largely driven by wage growth.

In approximately 45 minutes, investors await the UK preliminary S&P Global/CIPS PMI data for May, offering insights into the nation's economic health. Later in the day, the market will turn its attention to the US preliminary S&P Global PMI data for May.

Considering these developments, the newly identified ascending channel will serve as our guiding framework for today's trading activities.

Good Morning.

Trade closed manually:
Yesterday's trading session saw the closure of our buy position at break even, while our recent sell position incurred a loss as buying pressure emerged during the Asian session.

The GBP/USD faced renewed selling pressure following a larger-than-expected decline in the UK Retail Sales data for April, impacting market sentiment.

Currently, the pair appears to be consolidating within an ascending channel pattern. As we navigate through this phase, it's crucial to keep an eye on the price levels on the chart, which will guide our trading decisions for today. We'll closely monitor price action as the market digests the impact of the recent retail sales data.

Good Morningside

Trade active:
Three buy positions triggered; it is time to secure some profit

Trade smart. Trade consciously

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.