GBP/USD Analysis

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Forex Market Analysis - GBP/USD pair recovery accelerates on the far side 1.2400

1. GBP/USD's rebound from 1.2266 lows accelerates on the far side 1.2400
2. The pound extends recovery supported by a risk-on market mood and hits session highs at 1.2465.
3. Longer-term, the currency pair remains trapped between 1.2235 and 1.2645.

Sterling’s recovery from 1.2266 low on Thursday has gathered pace with the GBP/USD jumping past the 1.2400 level. The currency pair is return lost ground on Friday, reaching intra-day highs at 1.2450 space favored by a risk-on market mood and possibly by squaring United States dollar long positions earlier than the united kingdom market closing.

The pound picks informed lockdown restriction hopes

The pound is bouncing informed Friday once having lost nearly earlier in the week, on the rear of the negative outlook of the united kingdom, hit laborious by the COVID-19 pandemic and Brexit uncertainty.

The market, however, is welcoming with optimism the easing of lockdown restrictions, on hopes that world economic recovery from the coronavirus closing can be quicker than expected. moreover, April’s the United States Non-Farm Payrolls report, which has shown a less than expected job destruction, has contributed to the positive market mood.

GBP/USD trapped among a variety between 1.2235 and 1.2645

From a longer-term perspective, the currency pair remains forex trading sideways between 1.2235 and 1.2645 and, in line with the FX Strategists at UOB cluster it's probably to stay in this area for ensuing weeks; ‘The break of the ‘strong support’ level at 1.2370 on Wed (06 May) suggests that last week’s 1.2644 high may be a short-term high. That said, downward momentum is lackluster and it's too early to expect a sustained decline. From here, GBP is additional probably to consolidate and trade between 1.2280 and 1.2500 for an amount.”

 

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GBP/USD currency pair value Analysis: Recovery stalls close to 200-hour SMA/descending trend-line confluence barrier

1. GBP/USD currency pair added to the previous day’s sturdy recovery move from multi-week lows.
2. Mixed oscillators on hourly/daily charts warrant some caution for aggressive forex traders.

The GBP/USD currency pair designed on the previous day's sturdy intraday recovery from multi-week lows and gained some follow-through traction for the second consecutive session on Tuesday. The currency pair shot to a four-day high level of 1.2267, albeit struggled to increase the momentum and failing close to a declivitous trend-line resistance extending from late-April swing highs.

The mentioned hurdle currently coincides with 200-hour SMA and may act as a key important purpose for traders because the focus now shifts to the Fed Chair Jerome Powell's congressional testimony.

Meanwhile, technical indicators on hourly charts are gaining positive traction and support prospects for an extension of the pair's current recovery from sub-1.2100 levels. However, oscillators on the daily chart are however to catch up with the momentum and maintained their bearish bias, warranting some caution before putting any aggressive bullish bets.

Hence, it'll be prudent to attend for a sustained strength on the far side of the mentioned confluence hurdle before positioning for any more near-term appreciating move for the most important. The currency pair may then head towards reclaiming the 1.2300 round-figure marks before bulls eventually aim to check the following major hurdle close to the 1.2330-40 horizontal level.

On the flip facet, weakness back below the 1.2200 marks can reinforce the stiff resistance and may prompt some recent selling, dragging the currency pair any towards the 1.2175 support. Some follow-through selling currently appears to show the currency pair at risk of accelerates the autumn back towards the 1.2100 marks with some intermediate support close to the 1.2130 area.