In light of the last market session's revelations and the Federal Reserve's announcement of future rate cuts, albeit cautious in their application due to persistent inflation, the GBP/USD pair has displayed significant resilience. This robustness could be attributed to the anticipated USD weakness.
Technical analysis: The GBP/USD has recently approached a critical juncture, as demonstrated by its interaction with the 1.28 area, which has acted as resistance. The pair's ability to sustain above this level could be indicative of a continuance of the bullish trend. The marked resistance at 1.2900 is now the focal point for a bullish breakout. Should the pair retract and break below the 1.27 level, it might revisit the solid support zone in the blue shaded area areound 1.26. The price movements following the recent FOMC meeting, where Powell confirmed rate cuts but with caution, paint a complex picture for the pair's direction. The economy's pronounced strength, juxtaposed with expectations of rising unemployment, adds to the market's intricacies.
Our position: With an optimistic lens, we anticipate potential entry points for long positions, with particular interest if the price solidifies above the Fibonacci level and subsequently breaches the 1.28 level. The Fed's nuanced stance on rate adjustments amidst hot inflation warrants a bullish approach for GBP/USD, carefully considering the macroeconomic developments that continue to unfold.
Technical analysis: The GBP/USD has recently approached a critical juncture, as demonstrated by its interaction with the 1.28 area, which has acted as resistance. The pair's ability to sustain above this level could be indicative of a continuance of the bullish trend. The marked resistance at 1.2900 is now the focal point for a bullish breakout. Should the pair retract and break below the 1.27 level, it might revisit the solid support zone in the blue shaded area areound 1.26. The price movements following the recent FOMC meeting, where Powell confirmed rate cuts but with caution, paint a complex picture for the pair's direction. The economy's pronounced strength, juxtaposed with expectations of rising unemployment, adds to the market's intricacies.
Our position: With an optimistic lens, we anticipate potential entry points for long positions, with particular interest if the price solidifies above the Fibonacci level and subsequently breaches the 1.28 level. The Fed's nuanced stance on rate adjustments amidst hot inflation warrants a bullish approach for GBP/USD, carefully considering the macroeconomic developments that continue to unfold.
Comment:
GU shows increasing retail sentiment along with declining COT support. The recent downside this week could be a sign that price shifted to the downside already. Based on the retail and COT data, we are shifting our sentiment, looking for sells.
Comment:
GU flipped bearish after what seemed like a dovish hearing from the Fed yesterday. Retail is now majority long which is unusual to see. The talks of rate cuts could still fuel a rally against the dollar.
If the dollar flips to a weak sentiment as a result of rate cut expectations remaining unchanged, we could be looking at bullish GU.
If the dollar flips to a weak sentiment as a result of rate cut expectations remaining unchanged, we could be looking at bullish GU.