GBPUSD Outlook: Key Levels to Watch

GBPUSD outlook: Non-Farm Payrolls halted 3-month highs, what’s next for CPI and FOMC?

Key Events this week:

UK GDP
U.S consumer price inflation
Federal Funds rate and FOMC Projections

The recent addition of 272,000 jobs in May, as reported in the latest non-farm payroll results, halted the GBPUSD’s uptrend at the 1.2821 high, with a drop towards the 1.2690 low. The market sentiment for a Fed rate cut in July has also diminished. Negative expectations for the UK GDP on Wednesday predict a drop towards 0.0%, yet the greater market focus is expected with the release of U.S price inflation figures and the Fed Fund rate and projections.

Despite negative growth indicators from last week's ISM manufacturing PMI and JOLTS Job openings, positive data from ISM services PMI and non-farm payrolls have shifted sentiment towards a possibly hawkish outlook. The Federal Funds Rate is expected to hold at 5.5%, yet FOMC projections are expected to lead the higher share of volatility.

With respect to the monthly consumer price inflation, a 0.2% drop is expected this week, with yearly and core CPI stabilizing, potentially favoring the GBPUSD’s uptrend.

GBPUSD Outlook: GBPUSD – Daily Time Frame – Logarithmic Scale

GBPUSD Outlook GBPUSD_2024-06-10_16-02-14

Bullish Outlook:

Taking the Fibonacci extension tool from the October 2023 low, March 2024 high, and April 2024 low, the potential resistance levels are the following:

• 1.2830: aligns with the 0.618 extension level

• 1.2890: aligns with the 2024 High

• 1.2970: aligns with the 0.786 extension level

Bearish Outlook:

Taking the Fibonacci retracement tool from the April 2024 low towards the June 2024 high, the potential support levels are the following:

• 1.2680: aligns with the 0.272 retracement level along with the previous trend’s wave 4

• 1.2630 area: aligns with the 0.382 retracement and May 2024 high

• 1.2560: aligns with the 50% retracement level and bottom-end of the up-trending parallel channel

With respect to the relative strength index indicator, the RSI 14 is hovering near the neutral 50-zone

The charts are gearing up for high volatility, and the 5.5% rate hold is likely to be priced in by the time of its release. The usual priced in effects are expected to set the stage for opposing trends before the subsequent FOMC speech, potentially favoring the uptrend of the GBPUSD right before the speech and projections.

--- Written by Razan Hilal, CMT

Latest market news

S&P500 Forecast: SPX rebounds as big tech recovers & inflation is in focus

Yesterday 01:32 PM

Gold forecast: Metal aims to recover with core PCE data on tap

Yesterday 09:35 AM

USDJPY Forecast: Key Levels for BOJ and FOMC Week

Yesterday 07:23 AM

FOMC, BOJ, BOE take the reigns of market drivers: The Week Ahead

Yesterday 04:48 AM

Stabilisation in commodity, US stock futures bode well for AUD/USD longs

Yesterday 12:17 AM

USD/JPY selling recedes ahead of PCE inflation, crude oil slips in a gain

July 25, 2024 10:39 PM

Open an account today

Experience award-winning platforms with fast and secure execution.

Open account

Web Trader platform

Our sophisticated web-based platform is packed with features.

Learn more

Latest GBP USD articles

GBPUSD Forecast: Key Levels for the Week Head

By:

Razan Hilal, CMT

July 19, 2024 11:30 AM

EUR/USD, GBP/USD Forecast: Two trades to watch

By:

Fiona Cincotta

July 18, 2024 07:53 AM

How Could the US Presidential Election Impact Markets? A 40-Year Study Looking at 5 Key Markets

By:

Matt Weller CFA, CMT

July 17, 2024 05:20 PM

GBP/USD, DAX Forecast: Two trades to watch

By:

Fiona Cincotta

July 17, 2024 08:26 AM

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.