GBP/USD Weekly Forecast - 10/11: Trade Focus (Chart)

(MENAFN- Daily Forex) The GBP/USD finished the week of trading near the 1.29150 mark which was above the lows seen on Wednesday when the 1.28350 ratio was tested as behavioral sentiment was tested in full.

• Not unexpectedly volatility took hold of the GBP/USD last week as the currency pair reacted to the U.S election.
• 
  The GBP/USD climbed to a high of nearly 1.30450 mark on late Tuesday, but within half a day's time the 1.28350 vicinity produced a low on Wednesday.
• 
  Day traders trying to participate in last week's drama were hopefully using solid risk management.

Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money

After Donald Trump won the presidential election, the U.S Federal Reserve on Thursday (along with yes, the Bank of England a handful of hours before) cut interest rate costs by 0.25 to the 4.75% level. The cuts from the U.S and U.K central banks were expected in both cases. The GBP/USD sank to around the 1.28950 level Thursday mid-day, but then started to climb. The currency pair went into this weekend around 29150/USD Lows Tested and a Return to Normal Trading Conditions

While the trading in the GBP/USD was volatile it was not out of the ordinary. Traders with experience certainly knew fast conditions would be seen last week. Now that the U.S election is done and the Federal Reserve and Bank of England have acted, the coming week of trading will return to mostly normal trading conditions. Plenty of economic data will factor into trading in the coming days. The U.S will release CPI on Wednesday and another inflation report on Thursday, Britain will publish its growth numbers on Friday.

The GBP/USD did manage to climb above the 1.29000 level and sustain its value going into the weekend. The price of the currency pair is hovering near price values seen in the middle of August. Trading in the GBP/USD has certainly been bearish since the last week of September and now it may be time to ask if risk adverse trading is overdone. Financial institutions have more clarity regarding outlook over the mid-term and considerations will be given again to the U.S Federal Reserve's rhetoric Trading and Equilibrium in the GBP/USD

After a handful of rather turbulent weeks has been seen in Forex, including the GBP/USD, as financial institutions became cautious, speculators may believe the time is right to look for upside in the Forex pair. However, before day traders jump blindly into long positions they should make sure the current support levels are proving durable early this week.

If the GBP/USD can maintain support above the 1.29100 level and begin to test higher prices before the U.S Consumer Price Index numbers this Wednesday it may show financial institutions believe there is some upside to achieve.
However, for this to remain a belief and the GBP/USD to climb higher, it is likely the U.S CPI numbers will have to meet or come in weaker than estimated/USD Weekly Outlook:Speculative price range for GBP/USD is 1.28825 to 1.30450

The GBP/USD appears to be within an interesting lower price range. The 1.29000 level needs to be monitored. If trading falls below this level early this week and is sustained, this could be a bearish signal from financial institutions which may believe the election of Donald Trump will cause a stronger USD over the mid-term. However, if financial institutions feel they have clarity and think that U.S economic policy will now start to be effected by the policy of the U.S Federal Reserve again, there is a prospect the GBP/USD could see some bullish momentum develop.

The near-term is likely going to remain choppy as traders try to gauge sentiment. The past handful of nervous weeks should start to subside, but now the Trump effect will have to be studied in the coming days as equilibrium in the GBP/USD is sought. Risk management will be essential and perhaps there is a bit more volatility which will be seen via the results of the economic data starting this Wednesday.

Ready to trade our
weekly forecast ? Here's a list of some of the
top forex brokers in the UK
to check out.

MENAFN10112024000131011023ID1108870072