Pound Sterling found support at the thirty-eight percent Fibonacci retracement level ahead of the New Home Sales report, which is due to be released later today. The US Dollar Index indicates a bullish bias, trading above the 105.500 level and the 50-period Exponential Moving Average.
Overview
Pound Sterling found support at the thirty-eight percent Fibonacci retracement level ahead of the New Home Sales report, which is due to be released later today. The US Dollar Index indicates a bullish bias, trading above the 105.500 level and the 50-period Exponential Moving Average. Traders are expected to closely monitor the currency pair in light of the forthcoming release of significant economic data and the upcoming US presidential debate that could impact market sentiment and currency valuations.
High Impact Economic Events
Wednesday 02:00 pm (GMT+0): New Home Sales (USD)
Thursday 12:30 pm (GMT+0): Final GDP q/q (USD)
Thursday 12:30 pm (GMT+0): Unemployment Claims (USD)
Thursday 02:00 pm (GMT+0): Pending Home Sales m/m (USD)
Thursday 02:30 pm (GMT+0): Crude Oil Inventories (USD)
Friday 12:30 pm (GMT+0): GDP m/m (CAD)
Friday 12:30 pm (GMT+0): Core PCE Price Index m/m (USD)
Sunday 01:30 am (GMT+0): Manufacturing PMI (CNY)
Sunday 01:30 am (GMT+0): Non-Manufacturing PMI (CNY)
Sunday All Day: French Presidential Election (EUR)
Technical Analysis
Following a rebound from the year's low at 1.22994, the GBPUSD experienced a surge, reaching its highest price in 2024 at 1.28605. Notably, the price failed to dip below the previous low at 1.24457 and instead rose above the previous peak at 1.26344, indicating a bullish reversal termed a failure swing in technical analysis. Subsequently, the exchange rate crossed above the 50-period Exponential Moving Average (EMA), while the Momentum oscillator recorded values above the 100 baseline. Subsequent to the rally, a downward correction ensued, causing the GBPUSD to fall below the EMA and find support at the 38.2 percent Fibonacci retracement. Both the Momentum oscillator and the EMA are currently sending mixed signals, with prices hovering above the EMA while the Momentum registers values below its baseline.
Potential Upside Targets
If the bulls manage to take control of the GBPUSD market, traders may consider the following three potential upside targets:
1.27525: The initial upside target is estimated at 1.27525, representing the 161.8 Fibonacci extension drawn from the peak of the failure swing at 1.26344 down to its corresponding trough at 1.24457.
1.28605: The second price objective is seen at 1.28605, aligning with the year's highest price of 1.28605.
1.29435: The third price objective is calculated at 1.29435, corresponding to the 261.8 Fibonacci extension drawn from 1.26344 down to 1.24457.
Potential Downside Targets
If the bears manage to maintain control of the market, traders may find potential opportunities in the following four downside targets:
1.26344 The initial support level is identified at 1.26344, representing the peak marked on May 3.
1.25495: The second price objective is 1.25495, aligning with the S2 support level calculated using the weekly Pivot Point method.
1.24457: The third potential downside target is estimated at 1.24457, which represents the trough marked on May 9.
1.22994: An additional support level is determined at 1.22994, representing the beginning of the latest rally marked on April 22.
Conclusion
In conclusion, the GBPUSD pair is in a wait-and-see state ahead of the New Residential Sales report later today, the upcoming US presidential debate tomorrow, and the Personal Consumption Expenditures report, which is the Federal Reserve's primary inflation measure. It is essential for traders to remain up-to-date on the latest geopolitical and economic developments, trade wisely, and closely monitor market trends to potentially optimize investment returns and mitigate probable risks and losses.