The GBP/USD closed this week of trading near the 1.33705 ratio, this after touching a high around 1.34325 on Thursday before developing a slight reversal lower which needs some consideration.
- The GBP/USD touched values it had not traded since late February of 2022.
- The currency pair went into this weekend near the 1.33705 mark, but had touched it highs for the week on Thursday around 1.34325 before developing some choppy trading to close out Forex.
- The GBP/USD continues to maintain the higher levels of its long-term value, and technical traders have plenty to consider regarding current behavioral sentiment and how it will develop in the days to come.
The bullish trend in the GBP/USD has remained intact and even though the price of the currency pair did trade lower going into the weekend, the ability to sustain prices over the 1.33000 rather comfortably seems to remain a rather intriguing bullish signal. The low for the GBP/USD occurred last Monday when the 1.32500 mark came into view briefly, but after this lower challenge the currency pair began to reverse higher and sustain strength. Nervous selling keeps running into rather strong support.
Fundamentals and Behavioral Sentiment via Outlook
Simply put the GBP/USD exchange rate remains in a USD centric correlation which is factoring a dovish Federal Reserve. The U.S GDP results this past week matched expectations and inflation numbers though slightly mixed continue to show slight erosion. U.S jobs numbers will be published this Friday via the Non-Farm Employment Change and this will impact Forex and the GBP/USD.
While technical traders may not want to hear about it, the notion that financial institutions are positioning via their outlooks regarding the U.S Federal Reserve cannot be discounted. The question for many financial institutions is if the Fed will cut by 0.25% or by 0.50% in November. However, other financial institutions seem to have traded another 0.50% Federal Funds Rate cut into the GBP/USD already. The question now seemingly is if the Fed will cut by another 0.50% or .75% over the next handful of months. Caution may be the proper side to lean into for day traders as they try to ride the momentum of large financial institutions.
U.S Jobs Numbers and the Growing Shadow of the Presidential Election
When the U.S jobs numbers are published on Friday of this week, the outcome will certainly cause a reaction in the GBP/USD. If the numbers come in weaker than expected the Fed may be expected to cut by another 0.50% in November, which could propel the GBP/USD higher.
- However, traders should keep in mind the U.S elections continue to drawer closer; financial institutions know that the U.S Federal Reserve will announce its interest rate decision only two days after the election for President.
- This might keep the Fed cautious, but the large amount of U.S data and election worries is also likely to cause volatility in the coming days and certainly the end of this week.
GBP/USD Weekly Outlook:
Speculative price range for GBP/USD is 1.33090 to 1.35200
The bullish momentum of the GBP/USD has proven rather sustainable. Traders looking for more upside may want to remain cautious and use support levels to look for upside value. Early this week may see a continued test of equilibrium, but traders need to remember that by Thursday of this week financial institutions will start to brace and wager on the U.S jobs numbers.
The results from the Non-Farm Employment result will be the biggest factor in the GBP/USD this week, unless there is some sudden news event. If the GBP/USD remains within sight of the 1.34000 level early this week and maintains a rather stable price as the U.S jobs numbers come into focus, do not be surprised if the level is surpassed again. Traders should remember that volatility will be rampant on Friday of this week and risk management will be needed. If the GBP/USD surpasses the 1.34000 level and challenges highs seen late this past week, financial institutions may show rather dynamic bullishness and test additional highs.
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