GBP/USD – THE BULLISH SENTIMENT IS STILL STRONG DESPITE THE REVERSAL
Bullish View
- Take Profit: 1.2545
- Stop Loss : 1.2345
- Timeline: 1-2 days
Bearish View
- Sell Stop : 1.2425
- Take Profit: 1.2345
- Stop Loss : 1.2525
The American employment figures being strong apparently lead to a reversal for the GBP/USD pair as the DXY went up sharply last Friday. It went down to 1.2450 falling below last week’s low point at 1.2545. For fundamental analysis, there are no key economic data releases relevant to the cable pair as the US job numbers have already been released. However, we can expect another rate hike of 0.25% from the Fed due to the high inflation in the US economy. The US and UK composite PMI report won’t have any substantial impact on currency pairs in a typical situation. UK house price index by Halifax and the UK construction PMI number will be out soon but we cannot be sure about the impact they may have on the pair.
For technical analysts, we saw the pair shifting to key support level at 1.2447, the peak price on May 30th, following the reversal. The MACD indicator has also drifted above the neutral point as we saw the cable pair forming a break and retest pattern. The pair is staying above the Ichimoku cloud as well as the 50-period MA indicators. Hence, we can conclude that the overall sentiment is quite bullish despite the recent reversal. But this will be invalidated in case we notice a move below 1.2400 support level.