GBP/USD kicked off the new week on a positive move and jumped back above the 1.3900 mark. The set-up favours bulls but an upbeat US economic outlook might cap gains, FXStreet’s Haresh Menghani reports.

The USD price dynamics will continue to play a key role in influencing cable's intraday momentum

“Against the backdrop of the upbeat US economic outlook, US President Joe Biden's over $2 trillion infrastructure spending plan has been fueling expectations for an uptick in US inflation. This, in turn, has raised doubts that the Fed will retain ultra-low interest rates for a longer period, which should limit any meaningful slide in the US bond yields. This suggests that the path of least resistance for the USD remains up and the pair's ongoing positive move runs the risk of fizzling out rather quickly.”

“The constructive set-up is reinforced by the fact that technical indicators on hourly/daily charts have been gaining positive traction. Hence, some follow-through buying has the potential to lift the cable further towards the 50% Fibo. level, around the 1.3960-65 region, en-route the key 1.4000 psychological mark.”

“Sustained weakness below the 1.3900 mark (38.2% Fibo. level) might prompt some technical selling and drag the pair back towards the 1.3840-35 horizontal support. This is followed by the 23.6% Fibo. level near the 1.3800 mark, which if broken decisively will negate any near-term positive bias. The GBP/USD pair might then turn vulnerable to accelerate the fall towards intermediate support near the 1.3740 before eventually dropping to the 1.3700 mark and multi-week lows, around the 1.3670 region touched on March 25..”

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD corrects to near 0.6500 as hawkish Fed bets soar

AUD/USD corrects to near 0.6500 as hawkish Fed bets soar

The AUD/USD pair has dropped marginally below the psychological support of 0.6500 after facing barricades around the usual resistance of 0.6520, acting firmer for the past few trading sessions. Market mood has turned sour as North Korea launched a missile in early Tokyo.

AUD/USD News

EUR/USD extends recovery above 0.9900 as risk-off fades, US NFP in focus

EUR/USD extends recovery above 0.9900 as risk-off fades, US NFP in focus

The EUR/USD pair has crossed the immediate hurdle of 0.9900 confidently and is expected to establish above the same. The risk profile is getting cheerful now as S&P500 has rebounded firmly. Also, yields have cooled somehow as investors are shifting their focus toward the NFP data.

EUR/USD News

Gold aims to extend recovery above $1,720 as focus shifts to US NFP

Gold aims to extend recovery above $1,720 as focus shifts to US NFP

Gold price (XAU/USD) has turned sideways after sensing demand around the critical support of $1,700.00. The precious metal is aiming to cross the $1,720.00 hurdle and will find its next barricade around $1,730.00. 

Gold News

US House Committee turn to DoJ for CBDC development as SWIFT resolves cross-border transfer hurdle

US House Committee turn to DoJ for CBDC development as SWIFT resolves cross-border transfer hurdle

In a letter, the House Financial Services Committee (FSC) asked the Department of Justice (DoJ) for their CBDC assessment. The House Committee analyzed whether the Federal Reserve has the authority to issue a CBDC without authorizing legislation.

Read more

Stock Market: False dawn or not

Stock Market: False dawn or not

S&P 500 jubilation continued yesterday, and markets didn‘t really notice Fed‘s Williams throwing cold water on giving up the fight against inflation prematurely. The excessive moves in USD retreat well below 111.50 throughout yesterday.

Read more

Forex MAJORS

Cryptocurrencies

Signatures