GBPUSD remains stable near 1.2550 in the European morning on Monday.
GBPUSD closed modestly higher last week and appears to have stabilized at around 1.2550 to begin the new week. To continue moving higher in the near term, the pair must confirm 1.2550 as support.
The US Dollar (USD) came under severe selling pressure in the early American session on Friday. Following poor April data reports. Heading into the weekend. However, hawkish comments from Federal Reserve (FED) officials helped the currency erase Its losses caused the GBPUSD to reverse its daily rise.
The US Bureau of Labor Statistics announced that the unemployment rate increased to 3.9% in April from 3.8% in March. Nonfarm Payrolls (NFP) increased by 175,000 during the same time, falling significantly short of the market’s projection of 243,000. Other US data indicated that the ISM Services PMI fell into contraction zone in April, to 49.4 from 51.4.
On Friday, Chicago Fed President Austan Goolsbee downplayed the dismal job market figures, claiming that current levels were solid. Later in the day, Fed Board of Governors member Michelle W. Bowman stated that she would be inclined to hike interest rates further if evidence showed that inflation growth had slowed or reversed.
The Economic Calendar will not provide high-impact data releases on Monday. As a result, risk perception could influence the USD’s valuation and GBPUSD activity later in the day. Following a volatile Asian day, US stock index futures moved bullish in the early European session. A positive morning on Wall Street could help GBPUSD during American market hours. On Thursday, the Bank of England will announce its monetary policy choices.
GBPUSD Technical Analysis
Technical buyers may show interest after 1.2550 is confirmed as support.
The Bank of England will disclose its monetary policy choices later this week.
After briefly exceeding 1.2600 on Friday, GBPUSD lost a significant amount of its daily gains and ended the week near 1.2550, where the 200-day Simple Moving Average (SMA) is placed. If the pair makes a daily close above that level and begins to use it as support, buyers may remain interested. In In this situation, 1.2600 (Fibonacci 50% retracement of the most recent downturn) could be considered as the next resistance level before 1.2665 (Fibonacci 61.8% retracement) and 1.2700 (psychological, static level).
If GBPUSD fails to convert 1.2550 into support, sellers may take action. In this scenario, supports were found at 1.2500 (psychological level, static level), 1.2470 (100-period SMA on the 4-hour chart), and 1.2445 (Fibonacci 23.6% retracement).
