Forex Chart of The Day: GBPUSD Will The Bullish Trend Continue?

Will the price of GBPUSD remain in its bullish trend? Or will the price trade lower?

Watch the video to learn more…

GBPUSD Analysis

As the market landscape becomes increasingly uncertain and dynamic, market enthusiasts have been keeping a close eye on GBPUSD. It has been on a steady upward trend, forming higher highs and higher lows on a weekly timeframe. This bullish trend has piqued the interest of many, causing speculation to circulate about whether this upward trajectory will maintain its momentum.

Recently, the US ISM Services PMI data came in below the previous reading of 51.9, sitting at a somewhat concerning 50.3. This particular indicator is a key barometer of the health of the US economy, with a reading above 50 indicating growth, and below, contraction. While it is still in the expansion zone, the drop signifies a slowdown in the services sector that can impact the broader economy, potentially causing a ripple effect on the currency market.

The USD immediately showed signs of weakening off the back of this announcement, thereby fueling cable prices higher. The immediate reaction from the market underscores the sensitivity of currency movements to these crucial economic indicators. The declining USD gave room for GBP to climb, further strengthening its bullish pattern against the USD.

However, there’s a catch: Despite the current market data and economic indicators, the Federal Reserve’s future actions might shift the dynamics completely. It’s no secret that the market is still pricing in a rate increase by the Federal Reserve. This anticipation is crucial to remember, as interest rates can have a significant impact on currency value. The strengthening of interest rates traditionally props up the value of a currency. Should this rate hike come to pass, it could provide some uplift for the USD.

This could potentially curb the GBPUSD’s bullish momentum. However, the trajectory also hinges on the Bank of England’s actions, the UK’s economic indicators, and external factors such as global risk sentiment and geopolitical tensions.

GBPUSD

The price on the chart has traded through multiple technical levels and some observations included:

• Price found support at the supporting level of 1.2350.
• The weekly candle closed bullish here suggesting a move higher.
• If price trades higher, we could see prices head towards the highs of 1.2650.

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About The Author

Jonathan Kibbler

Jon Kibbler, our Senior Market Analyst, boasts over a decade of trading experience. He specializes in dissecting the intricacies of financial markets and sharing his expertise with precision. Jon’s insights have been featured at renowned events and platforms like Coindex, Forex Analytix, and Forex.com.

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