This week, key economic events are set to impact global markets, including the UK Claimant Count, US CPI data, and the European Central Bank's interest rate decision. Traders will closely monitor these releases for potential shifts in monetary policy and market sentiment, particularly in relation to the GBPUSD pair. Technical analysis suggests both upside and downside targets, while fundamentals such as labor market data and inflation trends will play a crucial role in shaping price movements.
Overview
This week, key economic events are set to impact global markets, including the UK Claimant Count, US CPI data, and the European Central Bank's interest rate decision. Traders will closely monitor these releases for potential shifts in monetary policy and market sentiment, particularly in relation to the GBPUSD pair. Technical analysis suggests both upside and downside targets, while fundamentals such as labor market data and inflation trends will play a crucial role in shaping price movements.
Key Economic Events
Tuesday 09:00 am (GMT+3) - UK: Claimant Count Change (GBP)
Wednesday 09:00 am (GMT+3) - UK: GDP m/m (GBP)
Wednesday 15:30 (GMT+3) - USA: CPI m/m (USD)
Wednesday 17:30 (GMT+3) - USA: EIA Crude Oil Stocks Change (USD)
Thursday 15:30 (GMT+3) - Europe: ECB Interest Rate Decision (EUR)
Thursday 16:30 (GMT+3) - USA: PPI m/m (USD)
Thursday 16:30 (GMT+3) - USA: Unemployment Claims (USD)
Technical Analysis
After reaching a high price of 1.32659 on August 27, the GBPUSD pair formed a peak at 1.32385 which failed to exceed the previous peak. A decisive close below the trough at 1.30875 will open the way for a bearish correction. By using the Fibonacci Retracement tool from the swing low to the swing high, we can identify three potential downside targets: 1.29942, 1.28432, and 1.25989. The 50-period Exponential Moving Average (EMA), the Momentum oscillator, and the Relative Strength Index (RSI) show mixed signals. Specifically, prices are above the 50-period EMA, and the RSI values are above 50, supporting the upward direction. Conversely, the Momentum oscillator registers values below the 100 baseline, indicating a decline.
Potential Upside Targets
If the bulls maintain control of the market, traders may consider the following four potential upside targets:
1.32162: The first resistance is seen at 1.32162, which corresponds to the weekly resistance (R1) calculated using the standard Pivot Points method.
1.32659: The second price target is identified at 1.32659, representing the swing high formed on August 27.
1.33028: The third resistance level is established at 1.33028, representing the weekly resistance (R2) calculated using the standard Pivot Points method.
1.33762: An additional resistance is recognized at 1.33762, aligning with the 161.8% Fibonacci Extension between the swing high of 1.32659 and the swing low of 1.30875.
Potential Downside Targets
If the bears take control of the market, traders may find potential opportunities in the following four downside targets:
1.30875: The initial level of support is identified at 1.30875, corresponding to the swing low marked on September 3.
1.30445: The second level of support is 1.30445, which corresponds to a daily high marked on July 17.
1.28903: The third level support is 1.28903, representing the 61.8% Fibonacci Retracement between the swing low 1.26648 and the swing high 1.32659.
1.26648: An additional support is seen at 1.26648, reflecting the swing low marked on August 8.
Fundamentals
Market participants are likely to focus on the upcoming UK economic data, including the Claimant Count Change, which reflects the state of the UK labor market. Any unexpected rise in unemployment claims could signal economic weakness and weigh on the pound. Additionally, expectations surrounding the Bank of England's monetary policy will play a role, particularly in light of inflation trends. In the US, investors are watching developments related to the Federal Reserve's rate outlook, driven by key data such as inflation and labor market reports. Broader global market sentiment, including geopolitical tensions or changes in risk appetite, may also influence the pair. Traders will be watching these events closely for any signals that could shift expectations for future interest rate decisions, impacting the GBPUSD movement.
Conclusion
In conclusion, this week's economic events are poised to shape the direction of the GBPUSD currency pair, with both technical and fundamental factors in play. Key data releases and central bank decisions will provide important insights into market sentiment, making it a pivotal week for traders to watch closely for potential price movements and trends.