GBP/USD Price Analysis: Cable bulls prod 50-DMA hurdle above 1.2100 as the key week begins
GBP/USD takes the bids to refresh a three-week high near 1.2125-30 during early Monday morning in Europe. It should be noted that the multiple catalysts including the UK jobs report and the US inflation data highlight this week an important one for the Cable traders.
That said, the quote cheers the upside break of the 21-DMA and previous resistance lines from early February. Adding strength to the north-side bias are the recently bullish MACD signals and the above 50 levels of RSI (14) that back the last week’s recovery moves. Read more…
GBP/USD bulls are in the market testing bear commitments at 1.2100
GBP/USD is 0.33% higher after the pair moved up from a low of 1.2063 to a high of 1.2103 following its biggest jump since January 6 while the US Dollar weakens broadly after Friday’s US labour market.
Nonfarm Payrolls showed a robust jobs growth although the rise in the Unemployment Rate and signs of cooling wage inflation have led markets to trim bets that the Federal Reserve will raise interest rates as sharply. The United States added 311,000 payrolls in February and the unemployment rate rose to 3.6%. However, a survey of economists polled by Reuters expected the United States to have added 205,000 jobs last month and the unemployment rate to hold steady at 3.4%. Average hourly earnings rose 0.2% last month after gaining 0.3% in January, below expectations of 0.3%. Read more…
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Today, the Pound Sterling has reached its highest level in two weeks against the US Dollar as investors alike anticipate positive news from the UK-EU trade discussions.
At the time of writing, the GBP/USD exchange rate is currently at 1.3730, thus constituting the strongest overnight move seen in this currency pair since the 31st October.
This performance comes as the UK and EU are said to be close to striking a trade deal ahead of the end of the year deadline. The potential agreement would ensure that the UK and EU have a smooth transition when they part ways at the end of the Brexit process in January.
Technical analysts have stated that the Pound could have even more upside potential over the course of the upcoming weeks as a result of the optimism surrounding the upcoming trade negotiation updates.
On top of trade talks, the Pound has also been buoyed by a supportive UK economic environment, including solid retail sales data and the country’s recent success in containing the spread of Covid-19. The Bank of England has noted that the economy could move in a positive direction even amid the coronavirus lockdown.
However, despite the Pound’s recent surge in value, analysts have cautioned that a breakdown in the negotiations or any new development that would weigh on the economic outlook could cause the currency to suddenly retrace its gains.
With the latest figures in mind, the Pound is expected to continue to rally due to investor confidence, though traders should remain mindful of the potential for sudden reversals.
