On the daily chart, we can see that GBPUSD probed above the 1.34 handle but couldn’t extend the gains past that level. This indicates a potential resistance area that traders need to keep an eye on. From a risk management perspective, the buyers will have a better risk-to-reward setup around the 1.3265 support zone. This level not only provides a potential entry point for buyers but also aligns with the 38.2% Fibonacci retracement level, adding to its significance. The confluence of these factors makes the 1.3265 level a key area to watch for potential price action.support zone where we can also find the 38.2% Fibonacci retracement level for confluence. This confluence of technical indicators increases the likelihood of a reaction at this level, making it a significant pivot point for the GBPUSD pair. On the other hand, the sellers will be looking for a break below this support zone to validate their bearish bias and potentially drive the price lower towards new lows. Monitoring the price action around these levels will be crucial for traders to gauge the strength of the current trend and make informed trading decisions.
Fundamental Overview
Currently, the USD is facing downward pressure due to the market's anticipation of rate cuts and positive global growth prospects, particularly in response to significant easing measures implemented by China. This dynamic has created a scenario where the performance of the greenback is being influenced by two key factors: the supportive nature of global growth for risk sentiment, which in turn weighs on the USD, and the aggressive pricing of rate cuts that could potentially be adjusted if there is an improvement in US economic data.
Shifting focus to the GBP, recent UK PMI data released on Monday indicated a slight softness compared to expectations, although the figures remain robust when compared to other major economies. The market sentiment suggests that the Bank of England (BoE) is likely to implement a total of 36 basis points worth of easing measures by the end of the year, with a 77% probability assigned to a 25 basis points cut in November.
Chris
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