The GBP/USD pair continued its strong momentum on Monday, reaching new yearly highs and trading just below the key psychological barrier of 1.30. However, despite the bullish run of the past two weeks, there are signs that the pair may be losing steam as it faces resistance at the 1.30 level. Daily studies indicate that the pair is overbought, and the 14-day momentum indicator is starting to trend downwards in the positive territory.
Investors are eagerly awaiting the upcoming speech from Fed Chairman Powell, which is expected to provide more insight into the central bank’s monetary policy. Recent data has shown that inflation is moving back towards the Fed’s 2% target, increasing expectations for a rate cut in September. However, Powell’s speech will be crucial in confirming these expectations and could have a significant impact on the market.
The recent assassination attempt on former US President and presidential candidate Donald Trump has added to the uncertainty in the market. This event has sent shockwaves through the markets and could continue to impact the performance of various assets, including the GBP/USD pair. While technical indicators are showing signs of a potential reversal, it is likely that upcoming events such as Powell’s speech and UK inflation data will play a key role in determining the pair’s short-term direction.
In a bearish scenario where the 1.30 resistance level holds, the price could see a pullback towards strong support levels at 1.2860/30. However, a sustained break above the 1.30 pivot could open the door for further upside momentum, with potential targets at 1.3100 and 1.3141. Traders should keep a close eye on these key levels as they could provide valuable insights into the pair’s future movements.
The GBP/USD pair is currently trading at new highs but is facing resistance at the key 1.30 level. The upcoming speech from Fed Chairman Powell and other market events could provide more clarity on the pair’s direction in the near term. Traders should exercise caution and closely monitor the key levels mentioned to make informed trading decisions in the current uncertain market environment.