The GBP is going through historic levels of volatility against USD. Following one such rally, it plunged back to 1.3562 just yesterday. This decrease comes at an important moment when market sentiment is mixed. Many things are in play, including the relative strength of the US dollar, expectations related to Bank of England policy and recent changes to the UK’s fiscal situation. Currently, GBP/USD had already started to experience a rebound, trading as high as 1.3675. However, looking ahead, analysts are predicting a further move that could see it swell back down or break up.
As for the currency pair’s future path, forecasts refer to a likely drop even down to 1.3528. On the upside, it could clearly return to 1.3675 at least if market forces move that way. Consolidation of the recent strong move higher is underway and is currently centered around the 1.3675 area. This level has become extremely important for traders.
Current Market Conditions
Our analysis of the latest trading has GBP/USD finished a drop to 1.3562 then countering up to 1.3675. Load market analysts are keeping a close eye on this dynamic, with plenty of room for more movement. If GBP/USD can break above the key resistance at 1.3675, this might trigger a powerful bullish trend. Such a step could see the pair heading up to the 1.4000 level.
If the currency pair manages to break lower from its immediate support at 1.3528 to 1.3485 this may suggest a downward trend continuation. Failure here could lead to a move back down to 1.3485 and eventually down to 1.3377. Importantly, 1.3377 marks the GBP/USD’s lowest closing level since June 23 of this year.
The MACD indicator further strengthens this analysis. Most recent monthly average. Its signal line is currently well below zero and decidedly downtrending. This is another technical indicator that GBP/USD momentum is turning strongly against the pair. A more bearish-than-bullish outlook seems prudent in the near term.
Trading Indicators and Analysis
Traders need to keep an eye on key resistance and support levels. Those layers will now protect them and guide them through today’s market experience. Resistance for GBP/USD is seen in the 1.3675-1.3788 area with support at 1.3528-1.3485 area. These levels are very important in figuring out where the next possible direction for the currency pair might be.
OANDA com, Focusing on the US dollar’s strength, which is influencing the current market sentiment. It is still incredibly strong against all other currencies, not least of all versus the GBP. Expectations regarding future monetary policy decisions by the Bank of England play a pivotal role in shaping trader sentiments. In addition, these decisions greatly impact market movements.
Technical indicators suggest there could be more downside ahead in the near-term. This is doubly true as GBP/USD approaches its major horizontal support levels. If the price breaks above resistance level 1.3675, market pundits suggest this might be an indication of a comeback to bullish trading. If this improvement occurs, it could drive GBP/USD to approximately 1.3788.
Future Outlook for GBP/USD
As traders look to place their bets on the direction GBP/USD takes from here, understanding the larger economic factors at play on GBP/USD will be key. The British pound outlook is inextricably tied to … These are things like fiscal policy, the general state of the economy within the UK.
Market analysts will be keenly looking for signs from the Bank of England. In the upcoming weeks, changes in interest rates and inflation targets could seriously impact the value of GBP against the USD.