Dec 09, 2024 (MENAFN via COMTEX) --
(MENAFN - Daily Forex) The GBP/USD closed last week having made gains and early trading in the coming days will be watched intently to see if values can be sustained above the 1.27000 level.
The GBP/USD which touched a low of nearly 1.26175 on Monday of last week went into the weekend around the 1.27360 ratio. The upwards movement of the GBP/USD will be a welcomed sign from traders who have thought the GBP/USD was oversold. The currency pair did touch a high around the 1.28125 mark on Friday before giving back some of its loftier gains, but the ability to close the week on a positive overall note is worth remembering.
Behavioral sentiment in the GBP/USD has been fragile and the British Pound has correlated to many other major currencies against overwhelming
USD centric strength since late September. A low of within the vicinity of 1.24900 was seen on Friday the 22nd of November, but since then buying has gradually shown it has more power. However, the GBP/USD does remain within what can be perceived as its lower depths when a six month chart is inspected, and only in the middle of its range when a one year chart is studied/USD and Lack of Data Impact will Change
The risk adverse conditions which have been demonstrated the past two months in the GBP/USD and other currency pairs has certainly created a shift downwards and bearish trends. However, price action the past week and a half is starting to show signs of shifting sentiment, this perhaps as financial institutions start to come to grips with the reality of a Donald Trump White House. Technical traders may not agree with the idea but the downward trend of major currency values against the
USD since the election of the President-elect was certainly effected by nervous sentiment.
Jobs data from the U.S this past Friday was the beginning of potential economic numbers starting to show signs of viability in Forex again. The U.S Non-Farm Employment Change results were slight better than expected, but the Federal Reserve is still expected to cut the Federal Funds Rate by 0.25 on the 18th of December. This week the U.S will issue important inflation numbers and later in the week the U.K will publish GDP results. These two reports could impact the GBP/USD. Data and sentiment will collide soon 1.28000 Level as Resistance for the GBP/USD
Having briefly challenged the 1.28000 level on Friday was a positive sign for the GBP/USD regarding its ability to move higher. No, the currency pair was not able to sustain the higher level, but the last time this ratio had been seen was on the 12th of November. Behavioral sentiment remains fragile and this is likely to remain the main power in Forex and the GBP/USD this coming week, but the idea that financial institutions will start to focus on economic data sooner rather than later is intriguing.
The GBP/USD looks like it is still in oversold territory, but this outlook likely has a better chance of being proven correct over the mid-term. Trading this coming week may remain choppy and the Consumer Price Index results from the U.S this Wednesday will impact outlooks.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money GBP/USD Weekly Outlook:Speculative price range for GBP/USD is 1.26100 to 1.28585
If U.S inflation numbers come in weaker this Wednesday this would help the GBP/USD possibly make a case for the 1.28000 level and above once again. If the inflation numbers are stronger than expected this would put the U.S Fed into a more cautious position and likely cause them to not make any FOMC rate cuts in January. The December cut is anticipated by financial institutions, but a January rate cut has likely been factored out of the GBP/USD already.
The currency pair will definitely react to the CPI numbers from the U.S, Friday's U.K GDP numbers will have less of an effect. However, if GDP numbers from Great Britain are bad and U.S inflation is high, then this could actually spur on selling of the GBP/USD quickly. Forex traders should remain cautious this week with the GBP/USD because economic data and behavioral sentiment are going to collide.
EURUSD Chart by TradingView
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