GBP/USD Price Analysis: Bulls are in the market and eye a bullish extension

GBP/USD bulls are in the market ahead of the central banks.
Bulls are the front side of the bullish trend leaving the bias bullish near and longer term.

Ross J Burland FXStreet

GBP/USD is grappling with the 1.22 area on Tuesday, keeping close to an almost seven-week high as traders reckoned banking stress could keep the Federal Reserve and the Bank of England from hiking rates much further.

The pair is on the front side of the bullish trend as we head into the central bank meetings this week and a multi-timeframe analysis determines a bullish bias for both the near-term and longer term as follows:

GBP/USD H1 chart

From an hourly perspective, the bulls are in control but the recent drop leaves prospects of some consolidation for the foreseeable sessions into the Federal Reserve event on Wednesday.

GBP/USD monthly chart

Zooming all the way out, the monthly chart shows that the market broke structure near 1.2245 but failed to hold above. The correction was relatively shallow so there are risks of a deeper move into the Fibonacci scale to at least test the 1.1650s and a 38.2% ratio. With that being said, there is just as much chance that the bulls will stay committed.

GBP/USD weekly charts

Afterall, on the weekly chart, the bear trend was broken and support has held so far.

This leaves an upside bias for the weeks ahead.

The price is in a box and there are equal highs and lows on both sides with liquidity above and below. However, the bullish bias persists while the price is on the backside of the prior bearish trend and in a phase of accumulation.

GBP/USD daily chart

There are also inverse head and shoulders on both the daily and 4-hour charts.

GBP/USD H4 charts

The 4-hour chart´s H&S´s neckline is already broken.

The M-formation is a reversion pattern and the price is being supported on the front side of the bullish trend.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD clings to 1.3500 amid marginal losses

GBP/USD alternates gains with losses around the 1.3500 neighbourhood on Tuesday. Indeed, Cable struggles to further extend its incipient recovery in a context of continuous instability in the Middle East and modest gains in the Greenback.

EUR/USD alternates gains with losses near 1.1540

EUR/USD navigates a tight range near 1.1550 in the latter part of Tuesday’s NA session. The US Dollar’s vacillating price action accompanies the pair while market participants gear up for the crucial US inflation data due on Wednesday.

Gold awaits US CPI inflation for the next big move

Gold is back on the bids and looks to regain the $4,400 level in Wednesday’s Asian trading, having found buyers near the $4,350 region. All eyes remain on the high-impact US Consumer Price Index data, which could determine if Gold stretches higher or corrects sharply.

Bitcoin risks liquidation-driven spikes amid deepening market apathy

Bitcoin has remained trapped between $60,000 and $80,000 for six consecutive months, reflecting a market increasingly defined by apathy and weak trading activity. However, such thin volumes combined with elevated open interest leave room for sudden spikes in liquidation, according to a Tuesday report by K33.

US Dollar: CPI keeps USD in tight ranges

OCBC’s Sim Moh Siong and Christopher Wong note the US Dollar softened as Fed hike expectations moderated and the US yield curve steepened. They argue that without a strong upside surprise in United States Consumer Price Index, the USD should stay rangebound, supporting carry trades.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.