Fundamental Analysis
During this week, the GBP/USD currency pair was influenced by several key economic factors from both the U.K. and the U.S. On the U.K. side, mixed economic data showed a slowdown in wage growth but a decrease in unemployment, creating a mixed outlook for the British economy. Despite lower wages, the drop in unemployment provided some support to the British pound. The Bank of England’s (BoE) cautious stance on inflation and potential future rate hikes was another factor that impacted the currency.
In the U.S., the Federal Reserve maintained its restrictive monetary policy, signaling that rates would stay high until inflation is fully under control. Some Fed officials hinted at potential rate cuts later in the year if economic conditions allowed, which added to the uncertainty around the U.S. dollar’s future strength.
Technical Analysis
Technically, GBP/USD started the week on a bullish note, rallying from support levels around 1.2664. The pair’s corrective move appeared to have completed, with the potential for a retest of the 1.3043 resistance level. A decisive break above this level would have confirmed the continuation of the uptrend, targeting levels around 1.3124 and possibly 1.3141. However, a failure to break above 1.3043 could have led to a bearish reversal back towards the 1.2664 support zone.
Daily pivot points and resistance levels were crucial for intraday traders. The 1.2798 support level was a key threshold to watch, with a breach potentially triggering a move lower.
Outlook
The overall outlook for the GBP/USD pair during this week was cautiously bullish. The pair’s performance was highly dependent on breaking key resistance levels and on the evolution of U.K. and U.S. economic data. Traders needed to monitor key events, including Fed statements and U.K. economic releases, which could drive volatility. If the pair managed to break through resistance levels, the upside potential was strong. However, downside risks remained if the economic data or central bank communications turned more hawkish or dovish than expected.
Thomas is a market analyst and self trader serving the community with his analysis and educational content from long time. The author has great exposure to different financial markets. He’s well-known for his day trading reviews and multiple timeframe analysis.
