GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- GBP/USD faces challenges in returning to bullish channel
- Bearish rebound initiates correctional wave on intraday basis
- Testing 1.2675 level may lead to further decline towards 1.2580 and 1.2515
The GBP/USD pair encounters challenges in confirming a return to its main bullish channel, resulting in a bearish rebound and the initiation of a correctional bearish wave on an intraday basis.
The pair is poised to test the 1.2675 level initially, with a potential breakthrough signaling further decline towards 1.2580 and 1.2515 as key support levels.
As a result, a bearish bias is anticipated for today, although breaking above 1.2790 would negate the negative outlook and guide the price back to its main bullish track.
The trading range for the day is projected between the support level of 1.2620 and the resistance level of 1.2790.
GBP/USD Price Chart – Source: Tradingview
GBP/USD – Trade Idea
Entry Price –Sell Limit 1.27371
Take Profit – 1.26591
Stop Loss – 1.28002
Risk to Reward – 1: 1.2
Profit & Loss Per Standard Lot = +$780/ -$631
Profit & Loss Per Micro Lot = +$78/ -$63
GBP/USD Price Analysis – June 22, 2023
Daily Price Outlook
The GBP/USD pair has risen to 1.2847 today, just slightly below the 61.8% projected level of 1.1801 to 1.2678 from 1.2306 at 1.2848. Currently, the intraday bias is leaning towards the upside.
The Bank of England (BoE) is expected to raise interest rates for the thirteenth consecutive time in its upcoming meeting as it continues to combat persistently high inflation rates in the United Kingdom.
Despite a decrease from double-digit levels, the UK still maintains one of the highest rates of consumer price inflation among major advanced economies.
Market attention will primarily focus on the language of the BoE’s monetary policy statement for any indications regarding its rate hike outlook, as Governor Andrew Bailey’s news conference and revised economic estimates will be absent.
The GBP/USD pair is maintaining its rebound gains below 1.2800, while the US Dollar (USD) lingers close to monthly lows following a sell-off triggered by less hawkish remarks from Fed Chair Jerome Powell during his testimony before the House Financial Services Committee.
Powell emphasized that inflation pressures remain high and that the process of bringing inflation back down to 2% will take time.
Recent UK inflation data, particularly the Core CPI index, which reached its highest rate since March 1992, has influenced market expectations for a 25 basis points (bps) rate hike by the BoE in June.
The likelihood of a 25 bps or 50 bps rate increase has divided investors, with the current estimate leaning toward a 25 bps hike.
Market caution prevails due to concerns about additional central bank actions, with US Treasury bond yields trading near weekly lows and US S&P 500 futures slightly lower. Besides the BoE policy statements, the US Jobless Claims and Powell’s ongoing deposition will also garner attention and influence the short-term direction of the GBP/USD pair.
The BoE is anticipated to release its monetary policy decision and meeting minutes on June 22, with expectations of a 25 bps increase in the benchmark interest rate to a 15-year high of 4.75%. Governor Bailey highlighted the tight labor market and the prolonged duration of inflation’s decline.
The recent UK inflation data supports the notion that the BoE will need to continue with interest rate hikes to address elevated inflation levels.
The GBP/USD pair lacks a clear intraday direction and remains range-bound above the mid-1.2700s as market participants await the BoE policy decision. Wednesday’s hotter-than-expected UK consumer inflation data and optimistic job statistics have increased expectations for tightening monetary policy by the BoE.
Fed Chair Powell’s remarks regarding the fight against inflation and the likelihood of future rate increases have restrained negative USD sentiment, thus limiting downward pressure on the GBP/USD pair.
Overall, the recent pullback from a 14-month high suggests that the path of least resistance for spot prices is higher, indicating a potential upward trajectory for the pair.
GBP/USD Price Chart – Source: Tradingview
GBP/USD – Technical Analysis
The GBPUSD pair continued its upward movement, testing the resistance line at 1.1940. However, it remains stable below this level, with the EMA50 providing additional strength to the resistance. The pair is anticipated to resume its corrective bearish wave, targeting the key level at 1.1625.
The Stochastic oscillator is currently displaying clear negative signals, indicating a potential decline in the upcoming sessions. The price action is confined within a bearish channel visible on the chart.
Hence, our bearish outlook remains valid and active. It is worth noting that a breakthrough above 1.1940, followed by 1.2020, would invalidate the expected decline and lead to a price recovery.
At 11:00 AM, the Bank of England (BOE) released its monetary policy decisions. The MPC Official Bank Rate Votes showed a unanimous decision of 7-0-2, indicating that all seven members voted to maintain the current bank rate, while two members voted for a rate cut.
The Monetary Policy Summary provided an overview of the BOE’s assessment of the economy and its policy outlook.
The Official Bank Rate remained unchanged at 4.50%. This decision reflects the BOE’s commitment to supporting the economy and ensuring price stability. Let’s also keep an eye on it.
GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- GBPUSD pair tests resistance at 1.1940, showing stability below the level.
- Stochastic oscillator signals potential for a decline in future sessions.
- Bearish outlook remains valid unless price breaks above 1.1940 and 1.2020 levels.
The GBPUSD pair continued its upward movement, testing the resistance line at 1.1940. However, it remains stable below this level, with the EMA50 providing additional strength to the resistance. The pair is anticipated to resume its corrective bearish wave, targeting the key level at 1.1625.
The Stochastic oscillator is currently displaying clear negative signals, indicating a potential decline in the upcoming sessions. The price action is confined within a bearish channel visible on the chart.
Hence, our bearish outlook remains valid and active. It is worth noting that a breakthrough above 1.1940, followed by 1.2020, would invalidate the expected decline and lead to a price recovery.
At 11:00 AM, the Bank of England (BOE) released its monetary policy decisions. The MPC Official Bank Rate Votes showed a unanimous decision of 7-0-2, indicating that all seven members voted to maintain the current bank rate, while two members voted for a rate cut.
The Monetary Policy Summary provided an overview of the BOE’s assessment of the economy and its policy outlook.
The Official Bank Rate remained unchanged at 4.50%. This decision reflects the BOE’s commitment to supporting the economy and ensuring price stability. Let’s also keep an eye on it.
GBP/USD Price Chart – Source: Tradingview
GBP/USD – Trade Idea
Entry Price –Buy Limit 1.27110
Take Profit – 1.27962
Stop Loss – 1.26766
Risk to Reward – 1: 2
Profit & Loss Per Standard Lot = +$852/ -$344
Profit & Loss Per Micro Lot = +$85/ -$34
GBP/USD Price Analysis – June 12, 2023
Daily Price Outlook
The GBP/USD pair has entered a consolidation phase of around 1.2580 after initially moving higher during the London session. The Cable aims to resume its upward trajectory and surpass the key resistance level 1.2600. Meanwhile, the US Dollar Index (DXY) has faced a strong resistance near 103.70, leading to a corrective pullback.
In the European session, S&P500 futures continue to advance as the probability of the Federal Reserve (Fed) adopting a neutral interest rate policy stance increases. Positive market sentiment prevails as Fed Chair Jerome Powell’s decision to pause monetary policy tightening alleviates concerns about a potential US recession. A report from Goldman Sachs indicates a reduced likelihood of a US economic recession, dropping from 35% to 25%.
The US Dollar Index (DXY) is expected to tread cautiously as investors await the release of the US Consumer Price Index (CPI) data scheduled for Tuesday. Projections suggest a slower acceleration of 0.3% in the monthly headline CPI compared to the 0.4% rise in April. The monthly core inflation is anticipated to remain stable at 0.4%.
Federal Reserve Chair Jerome Powell and his colleagues express concerns about persistent core inflation due to robust demand for durable goods and services. It is worth noting that the US service sector contributes two-thirds of the country’s Gross Domestic Product (GDP).
In the realm of the Pound Sterling, market participants eagerly anticipate the release of the UK Employment data for May. Estimates indicate a decrease of 9.6K in the Claimant Count Change, in contrast to the significant increase of 46.7K reported in April. The Unemployment Rate for the three months is expected to rise to 4.0% from the previous release of 3.9%.
Additionally, attention will be focused on a speech by Bank of England (BoE) Governor Andrew Bailey. Investors will closely monitor any indications regarding future monetary policy actions from the BoE.
GBP/USD Price Chart – Source: Tradingview
GBP/USD – Trade Idea
The GBPUSD pair is making positive strides, gearing up to continue its anticipated bullish run shortly, fueled by the momentum from the recently formed double-bottom pattern. We’re setting our sights on an impressive target of 1.2680 as the pair climbs.
However, the current Stochastic indicator hints at a little turbulence; we might witness some sideways zigzagging before the pair gets its rocket boosters back on.
Take note, though, if the pair slips below 1.2545, it’s like walking on a tightrope as it may dive into testing critical support at 1.2470 before taking another shot at the moon.
Keep an eagle eye on the 1.2500 support and 1.2660 resistance levels for today’s trading landscape.
GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- The GBPUSD pair is on the upswing, eyeing a bullish trend with a target of 1.2680, spurred by a double bottom pattern.
- Some sideways movement is possible due to Stochastic indicator’s current negativity, but keep an eye on the 1.2545 mark – breaking it could lead to testing support at 1.2470.
- Today’s trading range is likely between 1.2500 support and 1.2660 resistance, with a bullish trend expected.
The GBPUSD pair is making positive strides, gearing up to continue its anticipated bullish run in the near future, fueled by the momentum from the recently formed double bottom pattern. We’re setting our sights on an impressive target of 1.2680 as the pair climbs.
However, the current Stochastic indicator hints at a little turbulence; we might witness some sideways zigzagging before the pair gets its rocket boosters back on.
Take note though, if the pair slips below 1.2545, it’s like walking on a tightrope as it may dive to test critical support at 1.2470 before making another shot at the moon.
For today’s trading landscape, keep an eagle eye on the 1.2500 support and 1.2660 resistance levels.
GBP/USD Price Chart – Source: Tradingview
GBP/USD – Trade Idea
Entry Price – Buy Above 1.25595
Stop Loss – 1.25241
Take Profit – 1.26264
Risk to Reward – 1: 1.89
Profit & Loss Per Standard Lot = +$669/ -$354
Profit & Loss Per Micro Lot = +$66/ -$35
GBP/USD Price Analysis – May 25, 2023
Daily Price Outlook
Following a new six-week low of 1.2332 hit in the early European trading hours, the GBP/USD pair has started to bounce back. However, after a rather hesitant recovery, it’s expected that the pair might continue its downward trajectory as investors are favoring a risk-off mood due to looming US debt ceiling escalations.
Having recently breached a multiple-day low, GBP/USD is licking its wounds at a 1.5-month trough, approximating 1.2350 as Thursday’s early trading begins.
In the early Asian session, the GBP/USD pair showed weakness above the critical support level of 1.2360. The pair struggles to shield its downside, hampered by the robust strength of the US Dollar Index and the much-anticipated elevation of the US debt ceiling by the White House.
Despite an initial bump seen in UK inflation data, the GBP/USD pair has made a U-turn and forfeited most of its daily advances. According to the near-term technical outlook, as long as the pair remains below a vital resistance level around 1.2450, bears are likely to remain in control.
In the first half of the European session, the GBP/USD pair pulls back to the bottom of its daily trading range after an intraday bullish spike near 1.2470 lost momentum. The pair is currently hovering around 1.2420 and seems vulnerable to extend its recent downward slide, a trend observable over the past fortnight or so.
GBP/USD Price Chart – Source: Tradingview
GBP/USD – Technical Outlook
The GBP/USD currency pair is currently trading with a bearish bias as the US dollar strengthens due to solid fundamentals emerging from the US economy. The pair is currently hovering around the 1.2345 level.
On the four-hour timeframe, GBP/USD has formed three consecutive black candles followed by a bearish engulfing candle, indicating dominance by the British base in the market.
The pair has also breached the key support level at 1.2390, and a close below this level suggests a bearish sentiment. The RSI and MACD indicators are both in the oversold zone, signaling a potential bullish correction.
The price is currently in the middle of the upper range at 1.2395 and the lower range at 1.2300. It is advisable to wait for a retracement in the market and consider taking a sell position below 1.2395 or around 1.2375, with a target around 1.2300 or 1.2275.
GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- GBP/USD is trading with a bearish bias
- Key support level breached at 1.2390
- Waiting for retracement to consider sell position below 1.2395 or around 1.2375
The GBP/USD currency pair is currently trading with a bearish bias as the US dollar strengthens due to solid fundamentals emerging from the US economy. The pair is currently hovering around the 1.2345 level.
On the four-hour timeframe, GBP/USD has formed three consecutive black candles followed by a bearish engulfing candle, indicating dominance by the British base in the market.
The pair has also breached the key support level at 1.2390, and a close below this level suggests a bearish sentiment. The RSI and MACD indicators are both in the oversold zone, signaling a potential bullish correction.
The price is currently in the middle of the upper range at 1.2395 and the lower range at 1.2300. It is advisable to wait for a retracement in the market and consider taking a sell position below 1.2395 or around 1.2375, with a target around 1.2300 or 1.2275.
GBP/USD Price Chart – Source: Tradingview
GBP/USD - Trade Idea
Entry Price – Sell Below 1.23750
Stop Loss – 1.24000
Take Profit – 1.23000
Risk to Reward – 1 : 3
Profit & Loss Per Standard Lot = +$750/ -$250
Profit & Loss Per Micro Lot = +$75/ -$25
GBP/USD Price Analysis – May 18, 2023
Daily Price Outlook
Despite the Bank of England Governor Bailey's hawkish comments, the GBP/USD pair was unable to continue its previous upward trend and experienced a decline around the 1.2429 level. This was being pressured by the strength of the US dollar, which received support from recent hawkish remarks made by several FOMC members.
The USD Index (DXY), which measures the performance of the US dollar against a basket of currencies, reached a six-week high due to speculations that the Federal Reserve (Fed) will maintain higher interest rates for an extended period.
Bank of England Governor's Hawkish Remarks Support GBP/USD, US Dollar Pressure Prevails
It is worth noting that the British Pound received some support after the Bank of England Governor, Andrew Bailey, made hawkish comments regarding inflation and the need to bring it back to the target of 2%. This helped attract buyers for the GBP/USD pair. Although, the upticks were short-lived due to the strong US dollar, which exerted pressure on the GBP/USD pair.
GBP/USD Pair Faces Mixed Housing Market Data, US Dollar Strength Looms
The mixed housing market data in the US didn't have much impact on the GBP/USD pair. However, considering the overall fundamental situation, it appears that the US dollar is more likely to strengthen. It would be wise to wait for strong buying momentum before expecting a further recovery in the GBP/USD pair, especially with the upcoming BoE's Monetary Policy Report Hearings scheduled for Thursday.
Boosted Confidence and Market Recovery: Progress in US Debt Ceiling Negotiations and Global Risk Sentiment
US President Joe Biden and Republican leaders have conveyed their cautious optimism regarding reaching a deal to raise the US debt ceiling. This positive development has had a notable impact on investor confidence, leading to a modest recovery in the global risk sentiment. Therefore, the upbeat market could help GBP/USD pair to limit its deeper losses.
Additionally, this optimistic outlook has had a weakening effect on the safe-haven US Dollar, as investors seek higher-yielding and riskier assets. Furthermore, a slight decrease in US Treasury bond yields has further discouraged USD bulls from making aggressive bets. Overall, these factors indicate a shift in market dynamics influenced by the progress in debt ceiling negotiations and market sentiment.
GBP/USD – Technical Outlook
On Thursday, the GBP/USD currency pair is trading with a slight downward bias around the 1.2469 level. The GBP/USD movement is currently constrained as the downtrend line on the two-hour timeframe poses a significant obstacle around the 1.2500 level.
The British pound's recent dip below the 50-day exponential moving average indicates a potential decline towards the support level of 1.2450, with further downside targets at 1.2385 or 1.2365. Conversely, a break above the 1.2506 level could lead to a test of the next resistance level at 1.2545.
Notably, the RSI and MACD indicators show divergence, with RSI holding in the selling zone while MACD histogram remains above zero.
These conflicting signals suggest a cautious approach, with the recommendation to seek selling opportunities below the 1.2500 level, setting a stop loss around 1.2520 and targeting 1.2425.
Related:
* GOLD Price Analysis – May 18, 2023
GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
* GBP/USD trading with a slight downward bias around 1.2469 level.
* Downtrend line on the two-hour timeframe poses a significant obstacle at 1.2500 level.
* Potential support levels at 1.2450, 1.2385, and 1.2365 if GBP/USD continues to decline. Resistance at 1.2545 if it breaks above 1.2506 level.
On Thursday, the GBP/USD currency pair is trading with a slight downward bias around the 1.2469 level. The GBP/USD movement is currently constrained as the downtrend line on the two-hour timeframe poses a significant obstacle around the 1.2500 level.
The British pound's recent dip below the 50-day exponential moving average indicates a potential decline towards the support level of 1.2450, with further downside targets at 1.2385 or 1.2365. Conversely, a break above the 1.2506 level could lead to a test of the next resistance level at 1.2545.
Notably, the RSI and MACD indicators show divergence, with RSI holding in the selling zone while MACD histogram remains above zero.
These conflicting signals suggest a cautious approach, with the recommendation to seek selling opportunities below the 1.2500 level, setting a stop loss around 1.2520 and targeting 1.2425.
GBP/USD - Trade Idea
Entry Price – Sell Below 1.2500
Stop Loss – 1.2520
Take Profit – 1.2425
Risk to Reward – 1 : 1.8
Profit & Loss Per Standard Lot = +$517/ -$287
Profit & Loss Per Micro Lot = +$51/ -$28
GBP/USD Price Analysis – May 17, 2023
Daily Price Outlook
The GBP/USD pair experienced significant selling pressure for the second consecutive day, leading to a resumption of the bearish trend during the first half of the European session. As a result, spot prices dropped to a three-week low around the 1.2420 level.
The British pound faced additional weakness on Tuesday due to disappointing UK monthly job data, raising expectations that the Bank of England (BoE) may need to limit interest rate hikes to control inflation. Coupled with continued USD buying, this added to the bearish pressure surrounding the GBP/USD pair and contributed to its significant intraday decline.
In contrast, the USD Index (DXY), which measures the value of the US dollar against a basket of currencies, reached a nearly two-month high driven by multiple factors. Hawkish comments from Cleveland Federal Reserve (Fed) President Loretta Mester signaled that the US central bank might maintain higher interest rates for an extended period.
Additionally, concerns about a global economic slowdown increased demand for the safe-haven dollar. The release of weaker Chinese macro data on Tuesday further fueled worries about the post-COVID recovery in the world's second-largest economy, amplifying concerns of an economic downturn.
Furthermore, uncertainty surrounding the US government's borrowing limit prompted some investors to seek refuge in the greenback. However, a slight rise in US equities futures and a decline in US Treasury bond yields could limit the strength of the USD.
Nevertheless, given the prevailing market conditions, the GBP/USD pair is expected to continue its downward trajectory. From a technical perspective, the recent break below the lower boundary of an ascending trend channel that lasted over a month favors bearish traders and increases the likelihood of a further near-term depreciation towards the next significant support level around 1.2375-1.2370.
GBP/USD – Technical Outlook
During the Asian session, the GBP/USD currency pair is currently trading at the 1.2470 level. On the two-hour timeframe, there is a significant resistance around the 1.2496 level. After failing to break above this resistance, selling pressure has pushed the pair lower.
The 50-day exponential moving average is providing a notable resistance around the 1.2485 level. On the downside, the GBP/USD pair is likely to find support near the 1.2440 level.
This support level is reinforced by a double bottom pattern, and a break below it has the potential to expose the pair towards the 1.2400 level. It is important to note that a double bottom pattern often leads to an upward movement.
Therefore, the current strategy is to target the 1.2440 level until a decisive break below occurs. Traders may consider closing their positions near the 1.2440 level.
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* USD/JPY Price Analysis – May 17, 2023