GBPUSD Prediction: 1.2350 support is important for a bullish extension. On improving market sentiment, the sterling rallies closer to the 1.25 mark.
GBPUSD’s Crucial Level for Bullish Momentum is 1.2350 Support.
The GBPUSD is having an interesting week so far and mostly depends on the DXY and the market’s mood. As investor sentiment and its effects on the dollar prevail. There hasn’t been enough actual economic data to offer GBP any momentum.
Fundamental Framework
This pattern has persisted this morning as the GBPUSD has risen and nearly fully recovered from the selloff on Tuesday. It reached a low point of 1.2387. Traders appear satisfied that the news from US First Republic Bank won’t have a long-term impact on mood or cause a new selloff in bank equities, as sentiment stabilized. An Impetus came from US results disclosed yesterday after the US market closed. The US dollar was again under pressure. Microsoft and Alphabet (Google), two US technology behemoths, had positive Q1 profits.
We don’t anticipate that to alter seeing that the week’s central issue has been the state of the markets as a whole and it affects the USD. The only notable report on the economic calendar was US Durable Goods data. Assuming the markets remain positive for the rest of the week. We see the chances of a reprise of the recent peaks by GBPUSD. The GBP is likely to be supported before the FOMC meeting the following week. Owing to this and a hardline attitude around the (BoE) in light of last week’s UK inflation statistics.
Economic Activity Schedule
Technical Perspective
Following a strong start to the European session, the GBPUSD has mostly recovered from yesterday’s selloff on the daily timeframe. And is now trading around 1.2475. Due to recent market emotion being the main mover, the technical picture for GBPUSD is fairly cloudy and has seen a lot of hesitation.
Tuesday was the most difficult day for the pair in well over a week and showed a bearish enveloping daily candle ending. Today, however, we noticed a full pullback rather than an extension. And the duo is about to revisit the 1.2500 area again. What’s even more puzzling is that the daily timeframe (refer to the graph under) indicated early indications of a head and shoulder pattern developing. Also, in addition to a death cross on the H4 timescale when the 50-day MA passed under the 100-day MA.
The range between 1.2350 and 1.2550 offers possible range-bound chances. With recent movements on GBPUSD being mostly influenced by broader market sentiment. For, a bullish extension or a further downward revision, a daily candle closure either above or beneath the range top or bottom is crucial.
Important Levels to Keep an Eye Out For
Major Resistance levels:
- 1.2500
- 1.2550
- 1.2757
Major support levels:
- 1.2400
- 1.2350
- 1.2200
The GBPUSD Daily Graph
Source: TradingView
