GBP/USD – The Uptrend is Likely to Be Resumed Even After the Retreat

My FX List
June 6, 2023
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Long Position

  • Take Profit: 1.2545
  • Stop Loss : 1.2345
  • Timeline: 1-2 Days

Short Position

  • Sell Stop : 1.2425
  • Take Profit: 1.2345
  • Stop Loss : 1.2525

Looking at the price charts, we saw the pair shift to a critical support level around 1.2447, the top price on May 30th. As the GBP/USD pair formed a break and retest pattern, the MACD indicator also drifted above the neutral mark. The pair is trading above the Ichimoku cloud and the 50-period moving average. As a result, despite the recent reversal, we may infer that general sentiment is relatively bullish. However, if we see a move below the 1.2400 support level, this will be null and void.

The main cause of last Friday’s price reversal is the positive job data from the US as the US Dollar index made some gains which contributed towards the weakness of GBP. It fell to 1.2450, going below last week’s low of 1.2545. There are no important economic data releases with the potential to impact the pair price because the US employment data is out already. However, due to the rising inflation in the US economy, we might expect another 0.25% rate hike from the Fed. In most cases, the US and UK composite PMI reports will have no significant impact on currency pairs. The Halifax UK home price index and the UK construction PMI figure will be released soon, but can’t really talk about the kind of effect they will have on the pair price.

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