Technical Analysis

GBP/USD Price Analysis – Sep 25, 2024

By LonghornFX Technical Analysis
Sep 25, 2024
Gbpusd

Daily Price Outlook

During the European trading session, the GBP/USD currency pair edged lower but held near the 1.3400 level as the US dollar continued to weaken, nearing its yearly low. This weakness is driven by expectations that the Federal Reserve might deliver one more significant interest rate cut before the end of the year.

Meanwhile, Investors believe the Bank of England (BoE) will gradually lower interest rates, as hinted by BoE Governor Andrew Bailey, who recently stated that interest rates are likely to decrease slowly.

Looking ahead, the focus will shift to the US core Personal Consumption Expenditures (PCE) data for August, set to be released on Friday. This is the Fed's key inflation measure, and economists expect core inflation to rise slightly to 2.7% from 2.6% in July.

US Dollar Weakens Amid Fed Rate Cut Expectations, Boosting GBP/USD

On the US front, the broad-based US Dollar is weakening, pushing the GBP/USD pair near its yearly high. The US Dollar Index (DXY), which measures the dollar’s value against six major currencies, is hovering around 100.20.

This decline comes as investors expect the Federal Reserve (Fed) to implement one more large interest rate cut in its remaining two policy meetings this year. The Fed recently cut interest rates by 50 basis points (bps), bringing them to a range of 4.75%–5.00%, in an effort to strengthen the labor market and return inflation to its 2% target.

According to the CME FedWatch tool, the Fed is expected to reduce interest rates by another 75 bps before the year ends, likely through one 50 bps cut and one 25 bps cut. The probability of a 50 bps rate cut in November has jumped to 59%, up from 37% a week ago.

Out of the 12 members of the Federal Open Market Committee (FOMC), only Fed Governor Michelle Bowman favored a more cautious approach with a smaller, 25 bps cut. These expectations are putting downward pressure on the US Dollar, benefiting the GBP/USD pair.

BoE's Gradual Rate Cuts and Inflation Concerns Boost GBP/USD

Another factor boosting the GBP/USD pair is the expectation that the Bank of England (BoE) will gradually lower interest rates. BoE Governor Andrew Bailey recently mentioned that the path for interest rates is likely to trend downward, but slowly.

He expressed confidence that inflation will return to the bank’s target of 2%, though he did not specify exactly where rates would settle. Bailey also assured that interest rates are unlikely to drop back to the historic lows seen during the pandemic.

In the UK, inflation has been close to the 2% target in recent months. However, high inflation in the services sector remains a concern for BoE policymakers. The Service Consumer Price Index (CPI), which is closely watched by the bank, increased from 5.2% in July to 5.6% in August.

This persistent rise in service sector prices is one reason the BoE is carefully managing rate cuts, ensuring that inflation across all sectors stabilizes before making significant changes.

GBP/USD Price Chart - Source: Tradingview
GBP/USD Price Chart - Source: Tradingview

GBP/USD - Technical Analysis

The GBP/USD pair is currently trading at $1.33989, down 0.11%, showing signs of consolidation following a modest decline in the previous session. The pair’s pivot point is set at $1.33831, indicating that a break above this level could signal renewed bullish momentum.

Immediate resistance is found at $1.34293, with further resistance levels at $1.34551 and $1.34885. A break above these levels could push the pair higher, signaling a potential short-term trend reversal.

On the downside, immediate support is seen at $1.33594, followed by key levels at $1.33310 and $1.32993. If prices fall below these levels, the GBP/USD pair could experience a deeper pullback, especially as market participants remain cautious ahead of key economic data releases.

Technical indicators show mixed sentiment. The Relative Strength Index (RSI) is currently at 53, indicating neutral momentum, though a dip below 50 would suggest increased bearish pressure. The 50-day Exponential Moving Average (EMA) is positioned at $1.33655, offering a critical support level for short-term trading.

Given the current technical setup, traders might consider entering long positions above $1.33831, with a take-profit target of $1.34280 and a stop-loss set at $1.33591.

Related News

- GOLD Price Analysis – Sep 25, 2024

- EUR/USD Price Analysis – Sep 25, 2024

-  GBP/USD Price Analysis – Sep 23, 2024

GBP/USD

Daily Trade Ideas

GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Sep 25, 2024
Gbpusd

Daily Price Outlook

- Immediate Resistance at $1.34293; breaking this level signals potential bullish momentum.

- Immediate Support at $1.33594; a breach may target $1.32993.

- RSI at 53 reflects neutral sentiment, with a slight bias toward consolidation.

The GBP/USD pair is currently trading at $1.33989, down 0.11%, showing signs of consolidation following a modest decline in the previous session. The pair’s pivot point is set at $1.33831, indicating that a break above this level could signal renewed bullish momentum.

Immediate resistance is found at $1.34293, with further resistance levels at $1.34551 and $1.34885. A break above these levels could push the pair higher, signaling a potential short-term trend reversal.

On the downside, immediate support is seen at $1.33594, followed by key levels at $1.33310 and $1.32993. If prices fall below these levels, the GBP/USD pair could experience a deeper pullback, especially as market participants remain cautious ahead of key economic data releases.

Technical indicators show mixed sentiment. The Relative Strength Index (RSI) is currently at 53, indicating neutral momentum, though a dip below 50 would suggest increased bearish pressure. The 50-day Exponential Moving Average (EMA) is positioned at $1.33655, offering a critical support level for short-term trading.

Given the current technical setup, traders might consider entering long positions above $1.33831, with a take-profit target of $1.34280 and a stop-loss set at $1.33591.

GBP/USD Price Chart - Source: Tradingview
GBP/USD Price Chart - Source: Tradingview

GBP/USD - Trade Ideas

Entry Price – Buy Above 1.33831

Take Profit – 1.34280

Stop Loss – 1.33591

Risk to Reward – 1: 1.8

Profit & Loss Per Standard Lot = +$449/ -$240

Profit & Loss Per Mini Lot = +$44/ -$24

GBP/USD

Technical Analysis

GBP/USD Price Analysis – Sep 23, 2024

By LonghornFX Technical Analysis
Sep 23, 2024
Gbpusd

Daily Price Outlook

During the early European trading session, the GBP/USD currency pair continued its three-day losing streak, dropping to 1.3266 on Monday. This decline comes as the US Dollar sees a modest recovery, putting additional pressure on the major pair.

The Bank of England's cautious approach to interest rates, combined with steady inflation, adds to the uncertainty surrounding the pound, as traders look for clearer signals on monetary policy.

Looking ahead, all eyes will be on the flash reading of the US Purchasing Managers Index (PMI) scheduled for release later today.

A stronger-than-expected PMI could bolster the US dollar further, leading to additional selling pressure on the GBP/USD pair.

US Dollar Faces Pressure Amid Fed Rate Cut and Economic Uncertainty

Despite the rising expectations of a Fed rate cut, the broad-based US dollar has regained mild positive traction ahead of the flash reading of the US Purchasing Managers Index (PMI). Last week, the US Federal Reserve lowered its key overnight borrowing rate by half a percentage point, marking its first cut since the early days of the Covid pandemic.

The Fed's statement expressed greater confidence that inflation is moving toward its 2% target, with risks to employment and inflation goals now seen as roughly balanced.

However, Fed Chair Jerome Powell was careful not to claim victory over inflation, as pricing pressures still persist.

Looking ahead, the US Personal Consumption Expenditures (PCE) index, which is the Fed's preferred measure of inflation, is set to be released on Friday. This report may provide insights into inflation trends and the future of US interest rates.

Meanwhile, uncertainty about the US economic outlook, coupled with rising expectations of further Fed rate cuts later this year, is likely to keep pressure on the US dollar, particularly against the Pound Sterling (GBP).

Bank of England's Cautious Stance Bolsters GBP Against USD

On the other hand, Bank of England (BoE) Governor Andrew Bailey emphasized the importance of keeping inflation low. He stated that it’s crucial not to reduce interest rates too quickly or by too much to maintain stability.

In their latest monetary policy meeting, the BoE decided to hold interest rates steady at 5.0%. This decision came right after the UK reported its Consumer Price Index (CPI) inflation data, which remained unchanged at 2.2% year-over-year in August.

Bailey's cautious approach reflects the ongoing challenges in managing inflation and economic growth. By keeping interest rates steady, the BoE aims to balance the need for economic support while preventing inflation from rising.

As inflation data shows signs of stability, the central bank is carefully considering its next steps. Market participants will be watching closely for any signals from the BoE regarding future interest rate decisions, as these choices will play a significant role in shaping the UK’s economic outlook.

Therefore, the Bank of England's decision to hold rates steady and focus on inflation stability may strengthen the GBP against the USD. As market participants anticipate cautious monetary policy, the GBP/USD pair could see upward pressure if inflation remains controlled.

GBP/USD Price Chart - Source: Tradingview
GBP/USD Price Chart - Source: Tradingview

GBP/USD - Technical Analysis

The GBP/USD pair is currently trading at $1.33131, down by 0.05% as the pound faces modest pressure amidst a subdued market environment. Despite the minor dip, the broader technical outlook remains cautiously optimistic, with the pair poised near key levels.

The pivot point stands at $1.3419, a critical juncture that, if breached, could signal further upward movement. Immediate resistance is situated at $1.3361, with additional hurdles at $1.3438 and $1.3507. Should the pair rally above these levels, a renewed bullish push could unfold.

However, on the downside, the first support lies at $1.3198. A move below this level could trigger a deeper correction, with further supports at $1.3114 and $1.3035. These levels will be crucial in determining whether the pound can maintain its overall uptrend or if bearish momentum takes control.

Technically, the RSI is hovering at 66, suggesting that the pair is approaching overbought conditions, signaling caution for traders eyeing further gains.

Meanwhile, the 50-day Exponential Moving Average (EMA) sits at $1.3005, continuing to provide a solid foundation for the pair’s upward trajectory. As long as the price remains above this level, the broader trend remains supportive of the bulls.

In conclusion, a buy-above strategy remains attractive, with an entry price at $1.32643 and a profit target at the pivot level of $1.34194. Traders should consider placing a stop-loss at $1.31995 to protect against downside risks, particularly if the pair fails to break above its immediate resistance.

Related News

GOLD Price Analysis – Sep 23, 2024

EUR/USD Price Analysis – Sep 23, 2024

GBP/USD Price Analysis – Sep 18, 2024

GBP/USD

Daily Trade Ideas

GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Sep 23, 2024
Gbpusd

Daily Price Outlook

- GBP/USD faces immediate resistance at $1.3361, with a pivot point at $1.3419 critical for further gains.

- RSI at 66 suggests overbought conditions may be approaching, indicating potential for a pullback.

- The 50-day EMA at $1.3005 provides robust support, helping to maintain the bullish outlook.

The GBP/USD pair is currently trading at $1.33131, down by 0.05% as the pound faces modest pressure amidst a subdued market environment.

Despite the minor dip, the broader technical outlook remains cautiously optimistic, with the pair poised near key levels. The pivot point stands at $1.3419, a critical juncture that, if breached, could signal further upward movement.

Immediate resistance is situated at $1.3361, with additional hurdles at $1.3438 and $1.3507. Should the pair rally above these levels, a renewed bullish push could unfold.

However, on the downside, the first support lies at $1.3198. A move below this level could trigger a deeper correction, with further supports at $1.3114 and $1.3035. These levels will be crucial in determining whether the pound can maintain its overall uptrend or if bearish momentum takes control.

Technically, the RSI is hovering at 66, suggesting that the pair is approaching overbought conditions, signaling caution for traders eyeing further gains.

Meanwhile, the 50-day Exponential Moving Average (EMA) sits at $1.3005, continuing to provide a solid foundation for the pair’s upward trajectory. As long as the price remains above this level, the broader trend remains supportive of the bulls.

In conclusion, a buy-above strategy remains attractive, with an entry price at $1.32643 and a profit target at the pivot level of $1.34194.

Traders should consider placing a stop-loss at $1.31995 to protect against downside risks, particularly if the pair fails to break above its immediate resistance.

GBP/USD Price Chart - Source: Tradingview
GBP/USD Price Chart - Source: Tradingview

GBP/USD - Trade Ideas

Entry Price – Buy Above 1.32643

Take Profit – 1.34194

Stop Loss – 1.31995

Risk to Reward – 1: 2.3

Profit & Loss Per Standard Lot = +$1551/ -$648

Profit & Loss Per Mini Lot = +$155/ -$64

GBP/USD

Daily Trade Ideas

GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Sep 18, 2024
Gbpusd

Daily Price Outlook

- Immediate resistance at $1.3227, with support at $1.3113, marks key levels to watch.

- RSI at 57 signals mildly bullish momentum with further upside potential.

- 50-day EMA at $1.3125 supports the current short-term uptrend, favoring a bullish bias.

GBP/USD is currently trading at $1.31912, up 0.24%, showing signs of steady momentum. The pair is inching closer to its key pivot point at $1.3226, which marks an important inflection level.

Immediate resistance is just above at $1.3227, followed by additional resistance levels at $1.3265 and $1.3306. On the downside, support levels are found at $1.3113, with further support at $1.3060 and $1.3003.

The RSI stands at 57, indicating mildly bullish sentiment, with room for further gains if the upward momentum continues.

The price is currently hovering above the 50-day EMA, which is positioned at $1.3125, suggesting that the short-term trend is supported by technical factors.

As long as the pair maintains levels above the $1.3125 EMA, a bullish continuation could unfold, potentially breaking above the $1.3227 resistance.

Traders are keeping an eye on macroeconomic events, including the upcoming Bank of England meeting, which could create additional volatility. For now, the pair shows a potential buying opportunity above $1.31706, with a take profit at $1.32259 and a stop-loss at $1.31415.

Should the price break below the $1.3113 support level, it could signal a shift towards a more bearish outlook.

Overall, the pair is poised between critical support and resistance levels, making the $1.3226 pivot a key determinant for the next market move.

GBP/USD Price Chart - Source: Tradingview
GBP/USD Price Chart - Source: Tradingview

GBP/USD - Trade Ideas

Entry Price – Buy Above 1.31706

Take Profit – 1.32259

Stop Loss – 1.31415

Risk to Reward – 1: 1.9

Profit & Loss Per Standard Lot = +$553/ -$291

Profit & Loss Per Mini Lot = +$55/ -$29

GBP/USD

Technical Analysis

GBP/USD Price Analysis – Sep 18, 2024

By LonghornFX Technical Analysis
Sep 18, 2024
Gbpusd

Daily Price Outlook

During the European trading session, the GBP/USD pair continued its upward momentum, climbing near 1.3220 level. This surge followed the release of hotter-than-expected UK inflation data for August.

Meanwhile, the US Dollar is losing ground, weighed down by a dovish stance from the Federal Reserve, which further boosted the GBP/USD.

Looking ahead, investors are focused on the Bank of England’s (BoE) policy decision on Thursday. Before the recent inflation data, markets expected the BoE to keep interest rates unchanged at 5%.

However, with inflation still high, many now believe rates could stay at this level for the rest of the year.

Fed's Expected Rate Cut and Policy Shift May Heighten GBP/USD Volatility

On the US front, the Fed is widely expected to announce its first interest rate cut in over four years. According to the CME FedWatch tool, there's a 65% chance the Fed will lower rates by 50 basis points to 4.75%-5.00%, with the remaining probability favoring a smaller 25-bps cut.

The main focus now is on how fast the Fed will continue reducing rates, as officials have signaled growing concern over weakening labor demand rather than inflation.

In addition to the rate decision, investors will pay close attention to the Fed’s dot plot, which shows the long-term interest rate expectations from policymakers, and the updated economic projections.

Fed Chair Jerome Powell’s press conference following the announcement will also be crucial for understanding the central bank’s future policy path. Recent comments from Fed officials suggest that they are now more focused on weakening labor demand than on inflation.

This hints at a shift toward a more balanced policy approach as they look to normalize rates.

This news is likely to increase volatility in the GBP/USD pair. A Fed rate cut could weaken the US dollar, potentially pushing GBP/USD higher, but uncertainty around the pace of cuts and labor market concerns may keep movements unpredictable.

UK Inflation Surge Fuels Uncertainty Around BoE Rate Cuts, Boosting GBP/USD

Another factor boosting the GBP/USD pair is the hotter-than-expected UK inflation data for August. The Office for National Statistics (ONS) reported that core inflation, which excludes items like food and energy, rose by 3.6%, higher than the expected 3.5%, and up from 3.3% in July.

Additionally, services inflation, closely monitored by the Bank of England (BoE), increased sharply to 5.6% from 5.2% in July. This rise in inflation could make traders rethink their expectations of another interest rate cut from the BoE this year.

GBP/USD Price Chart - Source: Tradingview
GBP/USD Price Chart - Source: Tradingview

GBP/USD - Technical Analysis

GBP/USD is currently trading at $1.31912, up 0.24%, showing signs of steady momentum. The pair is inching closer to its key pivot point at $1.3226, which marks an important inflection level.

Immediate resistance is just above at $1.3227, followed by additional resistance levels at $1.3265 and $1.3306. On the downside, support levels are found at $1.3113, with further support at $1.3060 and $1.3003.

The RSI stands at 57, indicating mildly bullish sentiment, with room for further gains if the upward momentum continues.

The price is currently hovering above the 50-day EMA, which is positioned at $1.3125, suggesting that the short-term trend is supported by technical factors.

As long as the pair maintains levels above the $1.3125 EMA, a bullish continuation could unfold, potentially breaking above the $1.3227 resistance.

Traders are keeping an eye on macroeconomic events, including the upcoming Bank of England meeting, which could create additional volatility. For now, the pair shows a potential buying opportunity above $1.31706, with a take profit at $1.32259 and a stop-loss at $1.31415.

Should the price break below the $1.3113 support level, it could signal a shift towards a more bearish outlook.

Overall, the pair is poised between critical support and resistance levels, making the $1.3226 pivot a key determinant for the next market move.

Related News

EUR/USD Price Analysis – Sep 18, 2024

GOLD Price Analysis – Sep 18, 2024

GBP/USD Price Analysis – Sep 16, 2024

GBP/USD

Daily Trade Ideas

GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Sep 16, 2024
Gbpusd

Daily Price Outlook

- GBP/USD faces immediate resistance at $1.3209, with RSI nearing overbought levels, signaling caution.

- Immediate support is found at $1.3102, with the 50-day EMA at $1.3094 acting as critical support.

- As long as GBP/USD stays above the pivot point at $1.3158, the bullish outlook remains intact, targeting $1.3209 and above.

GBP/USD is trading at $1.31716, up 0.24%, maintaining a bullish tone as it approaches key resistance levels. Immediate resistance is found at $1.3209, followed by $1.3238 and $1.3260.

The bullish sentiment remains intact as the price stays above the pivot point of $1.3158, signaling potential for further gains.

However, the Relative Strength Index (RSI) is currently at 67, approaching overbought territory, suggesting a possible near-term pullback.

On the downside, immediate support lies at $1.3102, followed by $1.3077 and $1.3051. The 50-day EMA at $1.3094 is providing crucial support, reinforcing the broader bullish momentum. A break below this level could indicate a reversal, but as long as the price holds above $1.3158, traders may remain optimistic about further gains.

The overall outlook for GBP/USD stays positive, with buyers looking for an entry point above $1.31585. Targeting take-profit levels near $1.32059, traders may expect the pair to test higher resistance levels. However, with the RSI nearing overbought conditions, caution is warranted as profit-taking could emerge, potentially sending the pair back to test support levels.

GBP/USD Price Chart - Source: Tradingview
GBP/USD Price Chart - Source: Tradingview

GBP/USD - Trade Ideas

Entry Price – Buy Above 1.31585

Take Profit – 1.32059

Stop Loss – 1.31245

Risk to Reward – 1: 1.4

Profit & Loss Per Standard Lot = +$474/ -$340

Profit & Loss Per Mini Lot = +$47/ -$34

GBP/USD

Technical Analysis

GBP/USD Price Analysis – Sep 16, 2024

By LonghornFX Technical Analysis
Sep 16, 2024
Gbpusd

Daily Price Outlook

During Monday's European session, the GBP/USD pair continued its strong upward movement, climbing to around 1.3180 and peaking at 1.3195.

This rise was mainly fueled by the belief that the Bank of England (BoE) will approach policy changes more cautiously compared to the Federal Reserve (Fed).

Meanwhile, the USD Index (DXY), which measures the Greenback against a basket of major currencies, remains close to its year-to-date low from August.

Traders are speculating on a substantial rate cut by the Fed later this week, possibly reducing borrowing costs by 50 basis points. This expectation comes in response to recent data showing a slowdown in US inflation.

As a result, US Treasury bond yields are hovering near their 2024 lows, putting additional pressure on the USD. In the meantime, the overall positive market sentiment is also diminishing the Greenback's appeal as a safe-haven asset.

US Dollar Weakness and Fed Rate Cut Expectations Boost GBP/USD

On the US front, the broad-based US dollar, tracked by the USD Index (DXY), is struggling near its lowest point of the year, set in August. This decline comes amid expectations that the Federal Reserve (Fed) will ease its monetary policy more aggressively.

Traders are now betting that the Fed will cut interest rates by 50 basis points (bps) later this week, up from 30% a week ago to 61% according to the CME FedWatch tool.

This shift is driven by recent data showing a slowdown in US inflation, with the Producer Price Index (PPI) for August revealing a faster-than-expected drop in producer prices to 1.7%.

The US dollar's decline and expectations of a significant Fed rate cut have bolstered the GBP/USD pair, as investors anticipate that the Bank of England will be less aggressive in easing policies compared to the Fed, strengthening the British Pound.

Impact of Bank of England and UK Economic Data on GBP/USD

On the other hand, the British Pound (GBP) is benefiting from the expectation that the Bank of England (BoE) will ease its policies less aggressively than the Federal Reserve (Fed) in the coming year.

This helps boost the GBP as the Fed is expected to cut rates more sharply. However, there are still concerns in the market about the BoE's actions.

Recent data showed a slowdown in UK wage growth and flat GDP for two consecutive months in July, leading to some uncertainty about the GBP's future strength.

Despite the positive sentiment around the GBP, these economic indicators might temper enthusiasm among investors.

They could be cautious about making strong bets on the GBP/USD pair due to these signs of economic weakness.

As a result, while the GBP gains from expectations of less aggressive BoE policy easing, the recent UK data might make traders hesitant to take bold positions in the GBP/USD currency pair.

Therefore, the GBP/USD pair benefits from expectations of a less aggressive BoE policy easing compared to the Fed.

However, concerns over recent UK economic data, including slow wage growth and flat GDP, may temper investor enthusiasm and limit GBP gains.

GBP/USD Price Chart - Source: Tradingview
GBP/USD Price Chart - Source: Tradingview

GBP/USD - Technical Analysis

GBP/USD is trading at $1.31716, up 0.24%, maintaining a bullish tone as it approaches key resistance levels. Immediate resistance is found at $1.3209, followed by $1.3238 and $1.3260.

The bullish sentiment remains intact as the price stays above the pivot point of $1.3158, signaling potential for further gains.

However, the Relative Strength Index (RSI) is currently at 67, approaching overbought territory, suggesting a possible near-term pullback.

On the downside, immediate support lies at $1.3102, followed by $1.3077 and $1.3051. The 50-day EMA at $1.3094 is providing crucial support, reinforcing the broader bullish momentum.

A break below this level could indicate a reversal, but as long as the price holds above $1.3158, traders may remain optimistic about further gains.

The overall outlook for GBP/USD stays positive, with buyers looking for an entry point above $1.31585. Targeting take-profit levels near $1.32059, traders may expect the pair to test higher resistance levels.

However, with the RSI nearing overbought conditions, caution is warranted as profit-taking could emerge, potentially sending the pair back to test support levels.

Related News

GOLD Price Analysis – Sep 16, 2024

EUR/USD Price Analysis – Sep 16, 2024

GBP/USD Price Analysis – Sep 11, 2024

GBP/USD

Daily Trade Ideas

GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Sep 11, 2024
Gbpusd

Daily Price Outlook

- Immediate resistance at $1.3101, with the next key level at $1.3127.

- RSI at 53 suggests neutral momentum, leaving room for further upside.

- 50-day EMA at $1.3120 could serve as a key level for bullish confirmation.

The GBP/USD pair is trading higher at $1.31025, marking a 0.22% gain on the day as sterling continues to benefit from positive sentiment surrounding the UK economy.

The currency pair has been trading above key support levels, reflecting cautious optimism ahead of key economic data releases later in the week.

Key technical levels reveal immediate resistance at $1.3101, with the next barrier at $1.3127. Should bullish momentum persist, the pair could push towards $1.3170, representing a significant psychological resistance level.

On the downside, immediate support is located at $1.3012, with further support at $1.2976 and $1.2941, which could trigger bearish momentum if breached.

Technical indicators are pointing to a neutral-to-bullish outlook. The Relative Strength Index (RSI) is at 53, signaling that the market is neither overbought nor oversold, leaving room for further gains.

Meanwhile, the 50-day EMA sits at $1.3120, just above current price action, indicating that a break above this moving average could confirm a more sustained upward trend.

From a strategic perspective, traders may look to buy above $1.30726, targeting the pivot point at $1.31279 for potential profits. A stop-loss at $1.30435 is advised to mitigate downside risks, particularly if the pair retraces towards its support levels.

GBP/USD Price Chart - Source: Tradingview
GBP/USD Price Chart - Source: Tradingview

GBP/USD - Trade Ideas

Entry Price – Buy Above 1.30726

Take Profit – 1.31279

Stop Loss – 1.30435

Risk to Reward – 1: 1.9

Profit & Loss Per Standard Lot = +$553/ -$291

Profit & Loss Per Mini Lot = +$55/ -$29

GBP/USD

Technical Analysis

GBP/USD Price Analysis – Sep 11, 2024

By LonghornFX Technical Analysis
Sep 11, 2024
Gbpusd

Daily Price Outlook

Despite weaker-than-expected UK economic data, the GBP/USD pair continued its upward momentum, holding steady around 1.3082 for the second day in a row on Wednesday.

The main driver behind this strength was a weakening US dollar, which has been under pressure from expectations of a dovish stance from the Federal Reserve.

Traders are adopting a cautious approach, choosing to stay on the sidelines and wait for the upcoming US consumer inflation figures before making any bold moves.

UK Economic Stagnation and Production Decline Raise Concerns for GBP Amid BoE Rate Cut Expectations

On the BOE front, the UK Office for National Statistics revealed that economic growth was stagnant in July, failing to meet expectations of a modest 0.2% increase. This marks the second consecutive month of flat growth.

Meanwhile, both UK Industrial and Manufacturing Production dropped unexpectedly during this period.

The slowdown in wage growth in the UK has further increased expectations for additional interest rate cuts by the Bank of England (BoE).

These disappointing figures put pressure on the British Pound (GBP) as investors anticipate that the BoE might lower rates to boost the economy. The combination of flat growth and shrinking production suggests a struggling economy, leading to a more cautious outlook for the GBP.

US Dollar Weakens Amid Dovish Fed Expectations; Upcoming CPI Report to Impact GBP/USD Performance

On the US front, the broad-based US dollar has experienced some selling after a three-day winning streak, partly due to expectations of a dovish Federal Reserve.

This shift provides support to the GBP/USD pair, helping it hold above 1.3110. Traders are currently cautious, opting to wait for the upcoming US consumer inflation figures before making any significant moves.

The US Consumer Price Index (CPI) report, set to be released soon, will be crucial in shaping market expectations for the Federal Reserve's decision on interest rates at their next meeting on September 17-18.

On the data front, the August US Consumer Price Index (CPI) is expected to rise by 0.2%, with the annual rate projected to slow from 2.9% to 2.6%, its lowest level since 2021.

The core CPI, which excludes food and energy, is also anticipated to increase by 0.2%, maintaining a year-over-year rate of 3.2%.

This report is likely to impact the demand for the US dollar and influence the performance of the GBP/USD pair.

GBP/USD Price Chart - Source: Tradingview
GBP/USD Price Chart - Source: Tradingview

GBP/USD- Technical Analysis

The GBP/USD pair is trading higher at $1.31025, marking a 0.22% gain on the day as sterling continues to benefit from positive sentiment surrounding the UK economy.

The currency pair has been trading above key support levels, reflecting cautious optimism ahead of key economic data releases later in the week.

Key technical levels reveal immediate resistance at $1.3101, with the next barrier at $1.3127. Should bullish momentum persist, the pair could push towards $1.3170, representing a significant psychological resistance level.

On the downside, immediate support is located at $1.3012, with further support at $1.2976 and $1.2941, which could trigger bearish momentum if breached.

Technical indicators are pointing to a neutral-to-bullish outlook. The Relative Strength Index (RSI) is at 53, signaling that the market is neither overbought nor oversold, leaving room for further gains.

Meanwhile, the 50-day EMA sits at $1.3120, just above current price action, indicating that a break above this moving average could confirm a more sustained upward trend.

From a strategic perspective, traders may look to buy above $1.30726, targeting the pivot point at $1.31279 for potential profits. A stop-loss at $1.30435 is advised to mitigate downside risks, particularly if the pair retraces towards its support levels.

Related News

EUR/USD Price Analysis – Sep 11, 2024

GOLD Price Analysis – Sep 11, 2024

GBP/USD Price Analysis – Sep 09, 2024

GBP/USD