Daily Price Outlook
The GBP/USD pair received support from the overall weakness in the US Dollar (USD) and other factors. After hitting a daily low of 1.2853, the pair is currently trading at 1.2923.
However, the Pound Sterling's upside potential is being limited by concerns over a hawkish stance from the Bank of England (BoE) and its impact on the economic outlook.
As labor cost data showed more stability than expected, the Pound Sterling (GBP) faced selling pressure after a strong rally above the key resistance level of 1.2900.
The increased likelihood of a significant interest rate hike by the BoE has bolstered the GBP/USD pair. The BoE recognizes that higher disposable income will boost household spending power and drive overall demand.
Looking ahead, the pound sterling may encounter strong resistance at the 1.29 level. Despite reaching its highest point since April 2022, the GBP/USD pair's upward momentum could be dampened by negative changes in risk sentiment and a mixed employment report from the UK.
Nevertheless, the pair maintains its position above 1.2910, supported by the broad-based selling pressure on the US Dollar (USD) and the potential for additional rate increases by the BoE.
Continuing its ascent, the GBP/USD pair surpassed the crucial 1.2950 level ahead of the release of US inflation data. During the early Asian session on Wednesday, the pair remains firm, moving closer to 15-month highs.
The ongoing weakness in the US Dollar (USD) and the potential for further rate hikes by the Bank of England (BoE) contribute to the pair's upward momentum.
The GBP/USD pair continues to exhibit strong upward momentum, nearing our primary target of 1.3000. We anticipate this bullish trend to persist in the upcoming sessions, with additional targets at 1.3075 in focus.
As the price remains above 1.2848, the bullish bias is expected to maintain its dominance on both intraday and short-term timeframes, supported by the presence of a bullish channel on the chart.
However, it is important to note that a bearish correction is anticipated as the GBP/USD pair has entered the overbought zone, suggesting a potential pullback in price.
For today's trading, we expect the GBP/USD pair to trade within a range, with support at 1.2890 and resistance at 1.3050.
In summary, the overall trend for today is expected to be bullish, although there is a possibility of a bearish correction. Traders should closely monitor price levels and market conditions for potential trading opportunities.
GBP/USD Price Chart – Source: Tradingview
GBP/USD - Technical analysis
The GBP/USD pair is displaying clear upward momentum as it approaches our primary target at 1.3000. We anticipate the bullish bias to persist in the upcoming sessions, aiming for additional positive targets at 1.3075.
Hence, the bullish trend is expected to maintain its dominance on both intraday and short-term bases, characterized by the presence of a bullish channel on the chart. It is crucial for the price to stay above 1.2848 to achieve the anticipated targets.
However, it is worth noting that a bearish correction is anticipated as the GBP/USD pair has entered the overbought zone.
The projected trading range for today is situated between the support level at 1.2890 and the resistance level at 1.3050.
Overall, the trend for today is expected to be bullish with a possibility of a bearish correction.
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