It was an odd day in North American trade that saw a variety of trading instruments perform daring feats of acrobatics as they jumped, fell, and sometimes did both before the day was through. US equity markets were some of the most egregious offenders as the Dow was down over 200 points in late trade only to rally back up to finish down only 195, or around 1%. The S&P 500 didn’t fare much better by falling 1% as well, however, the typically correlated USD/JPY didn’t fall at all; it rose up close to 150 pips and challenged the psychologically daunting 120 level before retreating late. Other than the USD/JPY, the dollar didn’t fare too well and got kicked around by the other major currencies including the EUR, CHF, and CAD.
One currency that has had a lot of success against the USD lately is the GBP. While that wasn’t really the case today as the two currencies battled it out on both sides, it’d be surprising to see much more GBP strength from here. The nearly 950 pip rally that this pair has witnessed since the 12th of April has been surprising to say the least, particularly if you consider the uncertain nature of the UK elections coming up next week. Uncertainty tends to drive investors away, and the GBP/USD may be ripe for deliverance even though the USD hasn’t been getting many pats on the back lately.
Along with the near millennial rally for the GBP/USD, it has been following a pretty strong and resourceful uptrend. If this pair was to break through this trend line, it may signal the end of it and a strong retracement may be in order. If this were to retrace along Fibonacci lines, the 50% retracement near 0.5030 or the 61.8% retracement near 1.4920 look intriguing as they also line up with previous support/resistance points. Beware though that political uncertainty could move this pair even more than usual and has the potential to erase all of the gains this pair has enjoyed over the past three weeks.
Figure 1:
Source: www.forex.com
Recommended Content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
![EUR/USD stays in positive territory above 1.0850 after US data](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/money-euro-and-dollar-banknotes-17371247_XtraSmall.jpg)
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
![GBP/USD stabilizes above 1.2850 as risk mood improves](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/strong-pound-weak-dollar-17536259_XtraSmall.jpg)
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
![Gold rebounds above $2,380 as US yields stretch lower](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/gold-gm187363896-28836378_XtraSmall.jpg)
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
![Avalanche price sets for a rally following retest of key support level](https://editorial.fxstreet.com/images/Avalanche/Avalanche_XtraSmall.jpg)
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
![The election, Trump's Dollar policy, and the future of the Yen](https://editorial.fxstreet.com/images/Macroeconomics/Events/US%20Elections/Donald_Trump_closeup_XtraSmall.jpg)
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.