GBP/USD continued its advance last week as the currency pair not only fought off the lows, but began to move closer to the “accepted” price equilibrium.

GBP/USD continued its advance last week as the currency pair not only fought off the lows, but began to move closer to the “accepted” price equilibrium.

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Speculators who were expecting another strong bout of selling pressure to break out on GBP/USD have likely grown frustrated over the past two weeks. Granted, GBP/USD bearish reversals are part of the Forex landscape, but for now it looks like the worst of the GBP/USD downtrend has been swept away. The last week’s low for GBP/USD was on Monday 7e of November.

Interestingly, the low that was recorded at the start of last week did not break through the lows seen in the previous two trading days, which technically means that GBP/USD has been gradually building higher support levels. strong. While the fundamental data elements within GBP/USD remain fairly negative, it appears from a speculative perspective that behavioral sentiment has shifted and trading is technically leading higher.

Perhaps the worst news has been digested by financial firms for GBP/USD

While economic conditions regarding inflation and recessionary data remain problematic, many financial institutions may be looking at the medium to long term outlook for GBP/USD and bet on the upside. As one of the most traded currency pairs in the world, GBP/USD is a strong barometer of behavioral sentiment and its results over the past two weeks reflect what appears to be a dramatic change in direction for the USD.

  • Last Friday, UK GDP data turned more negative than expected with a 0.6% drop from the 0.4% estimate, but GBP/USD still managed to rise significantly before dipping. going into the weekend.
  • Next Wednesday, the UK will hold its monetary policy report hearings with members of the Bank of England, but there are unlikely to be many major surprises.

The upward momentum has been quick, so traders may want to be cautious of reactions

GBP/USD is expected to start this week of trading near the ratio of 1.18300, the last time this value was seen was on the 26the of August. Speculators shouldn’t be overconfident about the bullish trend that was demonstrated last week, but they shouldn’t be afraid of the direction either. Risk management that protects against the potential for sudden downturns should be employed. As always, day traders should keep their outlook geared toward price action that takes into account hourly fluctuations.

GBP/USD weekly outlook:

Speculative price range for GBP/USD is 1.15690 to 1.20750

The support below looks technically rather impressive. It seems far-fetched to believe that GBP/USD will suddenly resume its huge downtrend and find it back below 1.10000 anytime soon. Yes, it could happen, but it’s more likely that polite technical tests of close ratios could be natural targets via GBP/USD trades generated by financial institutions. The 1.18000 level should definitely be watched. And the support near the 1.17300 mark appears to be significant as it was the high reached on Thursday, before price momentum picked up and GBP/USD surged higher on Friday.

Should the 1.17000 mark become vulnerable, a test of 1.16700 to 1.16200 should be watched. Anything below the 1.16000 ratio this week would be a reaction to the negative market news generated, which is an unknown quantity at this time. Risk management should be used, and traders looking to short GBP/USD should ensure their goals are realistic, as there doesn’t seem to be a really big shift in attitude happening in the near term.

Speculators who want to take advantage of the current bull run should remain optimistic, but cautious. GBP/USD has gained a substantial amount over the past two weeks. Financial firms and speculators are certainly used to seeing GBP/USD trading near 1.20000 and above, but the uptrend that saw a sharp rise in price velocity last week may slow for a moment and take pause. Traders may want to stay bullish, but conservative speculators may want to wait until support levels are hit before triggering long positions on GBP/USD. After experiencing a long-term downtrend, GBP/USD may change direction, but is unlikely to follow a one-way upward path. Caution in purchasing is advised.

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