- The British pound initially tried to rally during the trading session on Monday but has given back gains as we can see that there is a little bit of give back after that massive move on Friday.
- On Friday, we got the speech from Jackson Hole as Jerome Powell that did in fact at least mention that interest rate cuts were a potential thing.
- Because of this, we have to pay close attention to the fact that markets are acting differently on Monday.
- It's almost as if we had some time over the weekend to reflect on things. And it does suggest that the United States dollar is not in the dustbin of history like people would have thought on Friday.
Fed to Cut? Probably.
Top Forex Brokers
That makes a certain amount of sense because if the Federal Reserve is in fact looking at cutting rates, it's because something's wrong with the U.S. economy. If that's the problem, there is a knock on effect for the rest of the world. So, typically what happens is the U.S. dollar becomes a bit of a safety trade as traders try to get into U.S. treasuries, which of course require U.S. The technical analysis on this market is somewhat flat, and I think that continues to be the case as well.
The 50 day EMA sits at the 1.3449 level and is flat, but we also have a significant resistance barrier above the 1.36 level and a significant support level right around the 1.3250 level with the 200 day EMA hanging around in the same region.
Ultimately, this is a market that I think continues to be somewhat sideways as we're closer to the top of the range than the bottom. I think it all lines up quite nicely. If we can break out of this range, then we can start to talk about bigger moves. But right now, due to the fact that we are squeezing and of course it's the middle of summer, volumes are a little bit thin. So I look at this as a range bound market.
Ready to trade our daily GBP/USD Forex forecast? Here’s some of the best forex broker UK reviews to check out.