GBP/USD Extends Winning Streak Amid UK Economic Figures and...

٢٤ أكتوبر ٢٠٢٣

GBP/USD Extends Winning Streak Amid UK Economic Figures and Improved Risk Sentiment

The GBP/USD currency pair is on a winning streak, marking its fourth consecutive day of gains as it approaches the Asian trading session on Tuesday. Trading near 1.22845, the pair is benefiting from a combination of factors, including the anticipation of UK economic data and improved risk sentiment.

US Dollar Correction:

One significant driver behind the GBP/USD's upward momentum is the correction observed in the US Dollar (USD). The greenback has been losing ground recently, in part due to downbeat US Treasury yields. This correction is lending support to the Pound Sterling (GBP) and helping it extend its gains.

Technical View:

From a technical standpoint, the GBP/USD pair has recently touched the 78.6% Fibonacci level. This technical level often serves as a turning point, and it suggests that the pair might experience a retracement in the near term. Key levels to watch for in this potential retracement are 1.2125 and, if the decline deepens, 1.2050.

It's important to note that the daily chart still shows a bearish trend for the GBP/USD pair, indicating that despite the recent gains, the overall longer-term sentiment remains bearish.

Upcoming UK Economic Data:

The United Kingdom (UK) is gearing up for the release of crucial economic figures, including employment and the S&P Global Purchasing Managers' Index (PMI) data. Economists are anticipating a decline in employment levels for the three months leading up to August. This decline suggests that companies might be scaling back their workforces in response to a less optimistic demand outlook.

Retail Sales and Bank of England Speculation:

The recent downturn in Retail Sales in the UK highlights the financial strain on households, driven by factors like high inflation and increased borrowing costs. This substantial decrease in consumer spending is likely to impact consumer inflation expectations. As a result, there is speculation that the Bank of England (BoE) might opt to maintain the current interest rates at 5.25% during its upcoming policy meeting in November, responding to the weakening dynamics in consumer spending.

Geopolitical Factors:

While the GBP/USD pair may have faced some obstacles, such as geopolitical tensions between Israel and Hamas, it's finding support from improved risk sentiment. Diplomatic initiatives aimed at easing tensions in the Israel-Hamas Gaza Strip have led to reduced market risk aversion, contributing to a more positive risk appetite among investors.

In conclusion, the GBP/USD pair's recent winning streak is driven by a combination of factors, including US Dollar corrections, upcoming UK economic data releases, and improved risk sentiment. While technical indicators suggest the possibility of a retracement, the longer-term bearish trend on the daily chart underscores the ongoing challenges the currency pair faces. Additionally, the decisions of the Bank of England in response to economic data will be closely monitored for potential market impact.



Short positions below 1.2370 with targets at 1.2125 & 1.5050 in extension.