- The GBP/USD began last week’s trading with a test of 1.35920 on early Monday. However, it needs to be remembered banks in Great Britain and the U.S were mostly closed for holidays. Meaning that the highs attained in the currency pair happened when a good deal of value was missing from the broad Forex markets. Selling began after these early highs were demonstrated and on late Wednesday and Thursday the GBP/USD was touching a low of nearly 1.34150.
- Buying followed and the GBP/USD did manage to go into the weekend near the 1.34455 ratio. Forex markets remain in a state of flux as financial institutions grapple with their outlooks and murky economic data. However, the USD has continued to produce weakness over the past few months and a technical glance at charts does highlight the GBP/USD remains within the higher elements of its mid-term charts.
The past handful of months in the GBP/USD have produce volatile result as large traders have dealt with the rhetoric from the U.S White House and potential implications on the economy of Britain. Yet, in the past month large traders have become more comfortable it appears with the daily diet of noise from President Trump and there are signs that talks regarding tariffs are making progress. And when tariff negotiations have been shown to be tough, there has been evidence that Trump is willing to take a softer tone in some circumstances.
The GBP/USD did come within sight of the 1.36000 level early this past week, and though it didn’t accomplish the higher ratio, the currency pair is within values it has last traversed in a sustained manner in February of 2022. Which indicated USD weakness has become rather pronounced and outlook may be starting to firm that the U.S Federal Reserve is once again in a position to start lowering its interest rates even though it continues to claim it is uncertain about its outlook. U.S inflation data this past Friday was tame and this opens the door for more verbal pressure from President Trump towards what has been a stubborn Federal Reserve.
Because Forex conditions remain choppy due to shifting daily sentiment, day traders need to remain cautious. The ability of the GBP/USD to go into this past weekend with some slight short-term gains is a sign that support levels may be durable and larger traders are stilling leaning into buying sentiment.
- U.S jobs numbers will be released this week. U.K inflation numbers printed about ten days ago were higher than expected.
- While economic data is crucial the broad Forex markets remain under the power of dynamic shifts in behavioral sentiment which will likely continue near-term.
- Choppy circumstances may continue to produce resistance which also proves difficult to overcome in the near-term.
The weakness in the USD has been pronounced in Forex since the first week of April. Financial institutions are proving that dynamic price action remains a danger because of continuously shifting short-term perspectives. But the bigger point it that the mid-term may continue to produce slightly higher GBP/USD ratios for consideration by speculators.
However, risk management near-term needs to be considered as President Trump remain a rather perplexing riddle for market sentiment. If the GBP/USD is able to generate power higher early this week it could set up the currency pair for a retest of the 1.35000 ratio in the coming days. U.S jobs numbers this coming Friday will be of interest, but there is a lot of time between then and now.
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