GBP/USD poised to continue bull-run after declining into long-term support

Joshua Gibson FXStreet

GBP/USD may be poised to continue pushing higher following a couple of weeks of declines. Sterling is currently trading up softly on thin markets to kick off the new weeks, treading into the 1.3840 region ahead of European markets.

Sterling has suffered at the hands of market sentiment as of late, with pullbacks in equities and spikes in bond yields to multi-year highs sending traders head-first into safe havens at the expense of risk assets such as the British Pound.

Despite recent selling pressure on the Queen's currency, fundamentals are beginning to look good for the UK, with Prime Minister Theresa May experiencing a bump in polling along with Brexit fears seeming to tame somewhat, even as the British Parliament and leaders within the EU continue to trade barbs back and forth. The Bank of England (BoE) is also upbeat, with a positive outlook on the UK's economy as economic growth begins to build on itself, causing the BoE to begin hinting at interest rates in the near future.

The Kingdom has a slew of economic data on the docket for Tuesday this week, most notably being CPI data for January at 09:30 GMT. A positive uptick here will only further cement the BoE on a path towards interest rates, with some market forecasts already calling for a May rate increase.

GBP/USD Technicals

In the near-term, Sterling still has its work cut out for it, with the recent swing low on Friday pricing in as support at 1.3784, while previous support-turned-resistance at 1.3855 will be working against bulls in early-week trading. Long-term, the Pound is setting up for a continuation of the long trend, with price currently hesitating at support from the 34 EMA, while the 200-day SMA is still decidedly bullish far below.

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.