The GBPUSD has been in an upward corrective phase after bouncing off the year's lows. A decisive violation of the key resistance level, 1.25410, will allow the Cable to reach higher exchange rates. Traders are expected to closely monitor a currency pair in light of the forthcoming release of significant economic data that could potentially impact currency valuations.
Overview
The GBPUSD has been in an upward corrective phase after bouncing off the year's lows. A decisive violation of the key resistance level, 1.25410, will allow the Cable to reach higher exchange rates. Traders are expected to closely monitor a currency pair in light of the forthcoming release of significant economic data that could potentially impact currency valuations.
High Impact Economic Events
Monday, All Day: German Prelim CPI m/m (EUR)
Tuesday, 01:30 am (GMT+0): Manufacturing PMI (CNY)
Tuesday, 12:30 pm (GMT+0): GDP m/m (CAD)
Tuesday, 12:30 pm (GMT+0): Employment Cost Index q/q (USD)
Tuesday, 02:0 pm (GMT+0): CB Consumer Confidence (USD)
Tuesday, 10:45 am (GMT+0): Employment Change q/q (NZD)
Tuesday, 10:45 am (GMT+0): Unemployment Rate (NZD)
Wednesday 12:15 pm (GMT+0): ADP Non-Farm Employment Change (USD)
Wednesday 02:00 pm (GMT+0): Final Manufacturing PMI (USD)
Wednesday 02:00 pm (GMT+0): ISM Manufacturing PM (USD)
Wednesday 02:00 pm (GMT+0): JOLTS Job Openings (USD)
Wednesday 02:00 pm (GMT+0): ISM Manufacturing Prices (USD)
Wednesday 06:00 pm (GMT+0): Federal Funds Rate (USD)
Thursday 06:00 am (GMT+0): CPI m/m (CHF)
Thursday 12:30 pm (GMT+0): Unemployment Claims (USD)
Friday 12:30 pm (GMT+0): Average Hourly Earnings m/m (USD)
Friday 12:30 pm (GMT+0): Non-Farm Employment Change (USD)
Friday 12:30 pm (GMT+0): Unemployment Rate (USD)
Friday 02:00 pm (GMT+0): ISM Services PMI (USD)
Technical Analysis
The GBPUSD has been following a downtrend since March 8, after it reached a daily high of 1.28936. Subsequently, it formed a sequence of consecutive lower peaks and troughs, indicating a downtrend. On April 22, the Cable hit an all-time low for the year at 1.22994. The recent rebound from the lows encountered resistance at the internal trendline at 1.25410, which was previously marked on April 26 and February 15. Both the 50-period Exponential Moving Average and the Momentum oscillator support the downward trajectory of GBPUSD. Specifically, the price is below the Moving Average line, while the Momentum oscillator registers values below the 100 baseline.
Upside Potential Targets
If the bulls manage to take control of the market, traders may consider the following targets:
1.25410: The first target corresponds to the internal trendline at 1.25410, which was previously marked on April 26 and February 15, respectively.
1.25891: The second target is 1.25891, aligning with the R1 weekly Pivot Point calculated using the standard method.
1.27095: The third target is 1.27095, matching the daily high marked on April 4.
Downside Potential Targets
Should the bears continue to dominate the market, there are four potential downside targets that traders may consider:
1.24443: The first support stands at 1.24443, aligning with the weekly Pivot Point calculated using the standard method.
1.22994: The second support is estimated at 1.22994, representing the year's all-time low.
1.22458: The third potential support could be identified at 1.22458, representing 423.6 percent Fibonacci Extension drawn from the swing low at 1.26675 to the swing high of 1.28035.
1.21059: The fourth potential support is observed at the R3 weekly Pivot Point calculated using the standard method.
Conclusion
The week is anticipated to be full of high-impact economic data, particularly the non-farm payroll report, which may determine the direction of the GBPUSD currency pair. If the Federal Reserve takes a more hawkish stance than the Bank of England, the GBPUSD is likely to decline. This could lead investors to focus more on the US dollar, which may cause an increase in demand due to the Fed's hawkish stance. Alternatively, the GBPUSD may continue its upward correction.