GBP/USD Hovers Near 1.2170: Awaiting Key Central Bank Decisions
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GBP/USD Hovers Near 1.2170: Awaiting Key Central Bank Decisions
The GBP/USD currency pair displayed a somewhat range-bound pattern during the Asian trading session, and it later retreated to the 1.2170 territory in the European morning. As per the near-term technical analysis, the prevailing bearish bias appears to be holding firm. The price action is currently positioned within the range of the 50% and 61.8% Fibonacci retracement levels, raising the prospect of the 1.2200 region serving as a key resistance zone. This juncture could prompt a reversal, leading the price back in the direction of the broader bearish trend. Consequently, the focus is on identifying potential short opportunities within this area.
Shifting our attention to the fundamental factors influencing the market, the weekend saw the United Arab Emirates (UAE) calling for an emergency meeting of the UN Security Council to address the situation in the Gaza Strip. The UAE's appeal emphasized the need for an immediate ceasefire to ensure the safety of civilians and civilian infrastructure.
This development seems to have elicited an improved risk sentiment as trading began on Monday. In this regard, the UK's FTSE 100 Index advanced by over 0.5% during the European session. Furthermore, US stock index futures reflected a positive outlook, hinting at a bullish opening for Wall Street.
However, the US Dollar (USD) has remained relatively robust in the face of these developments, creating challenges for GBP/USD to gain substantial traction. While there is potential for the USD to lose some of its appeal if the risk rally gathers momentum in the latter part of the day, the absence of high-impact data releases on the US economic calendar for Monday leaves room for uncertainty.
Looking ahead, traders will likely exercise caution as the week progresses, given that both the Federal Reserve (Fed) and the Bank of England (BoE) are set to announce their respective monetary policy decisions. This eventuality could prompt many market participants to stay on the sidelines until the central banks' policy outlooks become clearer, potentially limiting the GBP/USD's near-term price action.
Our preference
Below 1.23325 look for further downside with 1.2050 & 1.19500 as targets.
The GBP/USD currency pair displayed a somewhat range-bound pattern during the Asian trading session, and it later retreated to the 1.2170 territory in the European morning. As per the near-term technical analysis, the prevailing bearish bias appears to be holding firm. The price action is currently positioned within the range of the 50% and 61.8% Fibonacci retracement levels, raising the prospect of the 1.2200 region serving as a key resistance zone. This juncture could prompt a reversal, leading the price back in the direction of the broader bearish trend. Consequently, the focus is on identifying potential short opportunities within this area.
Shifting our attention to the fundamental factors influencing the market, the weekend saw the United Arab Emirates (UAE) calling for an emergency meeting of the UN Security Council to address the situation in the Gaza Strip. The UAE's appeal emphasized the need for an immediate ceasefire to ensure the safety of civilians and civilian infrastructure.
This development seems to have elicited an improved risk sentiment as trading began on Monday. In this regard, the UK's FTSE 100 Index advanced by over 0.5% during the European session. Furthermore, US stock index futures reflected a positive outlook, hinting at a bullish opening for Wall Street.
However, the US Dollar (USD) has remained relatively robust in the face of these developments, creating challenges for GBP/USD to gain substantial traction. While there is potential for the USD to lose some of its appeal if the risk rally gathers momentum in the latter part of the day, the absence of high-impact data releases on the US economic calendar for Monday leaves room for uncertainty.
Looking ahead, traders will likely exercise caution as the week progresses, given that both the Federal Reserve (Fed) and the Bank of England (BoE) are set to announce their respective monetary policy decisions. This eventuality could prompt many market participants to stay on the sidelines until the central banks' policy outlooks become clearer, potentially limiting the GBP/USD's near-term price action.
Our preference
Below 1.23325 look for further downside with 1.2050 & 1.19500 as targets.
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