GBP/USD Analysis:
The GBP/USD pair has resumed its bullish trajectory after a brief period of sideways movement. On Friday, July 5, 2024, the pair breached Wednesday's high, signaling a continuation of the upward trend towards the upper side of the ascending channel line. The bullish momentum remains robust, evidenced by the substantial distance between the 50-day Exponential Moving Average (EMA) and the 200-day EMA.
However, some conflicting signals need attention. Despite the new highs in price, both the MACD and RSI indicators have not reached new highs, suggesting potential bearish divergence. Additionally, the recent bullish impulsive move lacks the strength observed on Wednesday, characterized by larger bullish candlestick bodies.
Despite these mixed momentum signals from the EMAs, oscillators, and candlestick patterns, the bullish sentiment persists. Key support levels are identified at Wednesday's high, previously a resistance level, which is now expected to act as support. The 50-day EMA also serves as a crucial support level.
In the short term, GBP/USD is likely to test the Fibonacci extension level of 161.8% or the upper boundary of the ascending channel.
Among today's key events impacting GBP/USD include the Halifax House Price Index (MoM and YoY) and the Mortgage Rate for June in the UK. The low impact of these data points suggests limited direct influence on GBP/USD. However, broader market sentiment may be influenced by high-impact events such as German Industrial Production, and various critical US data releases, including Nonfarm Payrolls, Average Hourly Earnings, and the Unemployment Rate.
These significant US economic indicators are expected to cause substantial volatility in the market, which could, in turn, affect GBP/USD. Traders should be vigilant of these releases and monitor how they impact the overall market sentiment.
In conclusion, while GBP/USD continues its bullish trend, traders should be cautious of potential mixed signals from technical indicators and remain aware of upcoming economic data releases that could influence market movements. The key support levels to watch are Wednesday's high and the 50-day EMA, with the next targets being the Fibonacci extension level of 161.8% and the upper side of the ascending channel.
| Time | Currency | Impact Level | Event | Actual | Forecast | Previous |
|---|---|---|---|---|---|---|
| 06:30 | JPY | Low | Household Spending (MoM) (May) | -0.3% | 0.5% | -1.2% |
| 06:30 | JPY | Low | Household Spending (YoY) (May) | -1.8% | 0.2% | 0.5% |
| 13:00 | GBP | Low | Halifax House Price Index (MoM) (Jun) | -0.2% | 0.2% | 0.0% |
| 13:00 | GBP | Low | Halifax House Price Index (YoY) (Jun) | 1.6% | 1.6% | |
| 13:00 | EUR | High | German Industrial Production (MoM) (May) | -2.5% | 0.2% | 0.1% |
| 14:00 | CHF | Medium | SECO Consumer Climate | -37 | -35 | -38 |
| 14:00 | EUR | Medium | German Buba President Nagel Speaks | |||
| 15:30 | GBP | Medium | Mortgage Rate (GBP) (Jun) | 7.98% | 7.93% | |
| 16:40 | USD | Medium | FOMC Member Williams Speaks |
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