GBP/USD Defends Fed Symposium Rally
GBP/USD seems to be defending the rally following the Fed Symposium as it retraces the decline from the start of the week.
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British Pound Outlook: GBP/USD
GBP/USD seems to be defending the rally following the Fed Symposium as it retraces the decline from the start of the week, but the exchange rate may consolidate over the remainder of the month should it track the flattening slope in the 50-Day SMA (1.3493).
GBP/USD Defends Fed Symposium Rally
Keep in mind, GBP/USD bounced back ahead of the May low (1.3140) to curb the threat of a head-and-shoulder formation, and the exchange rate may extend the advance from the start of the month as Chairman Jerome Powell warns that ‘the shifting balance of risks may warrant adjusting our policy stance.’
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Speculation for lower US interest rates may keep GBP/USD afloat as the central bank prepares to further unwind its restrictive policy, but the ongoing expansion in employment may lead to a wider dissent within the Federal Open Market Committee (FOMC) as the central bank continues to combat inflation.
With that said, GBP/USD may further retrace the decline from the monthly high (1.3595) as it seems to be negating a head-and-shoulders formation, but the exchange rate may may struggle to retain the rebound from the monthly low (1.3142) if it fails to defend the rally from the end of last week.
GBP/USD Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; GBP/USD on TradingView
- GBP/USD retains the advance from the start of the month after struggling to close below 1.3410 (78.6% Fibonacci retracement) to 1.3460 (23.6% Fibonacci extension) zone, and a breach of the monthly high (1.3595) may push the exchange rate toward 1.3650 (38.2% Fibonacci extension).
- A move above the July high (1.3789) may lead to a test of the 1.3800 (161.8% Fibonacci extension) to 1.3810 (50% Fibonacci extension) region, but GBP/USD may give back the advance from the start of August if it fails to defend the rally from the end of last week.
- A close below the 1.3410 (78.6% Fibonacci retracement) to 1.3460 (23.6% Fibonacci extension) zone may push GBP/USD toward 1.3310 (100% Fibonacci extension), with a move/close below 1.3210 (50% Fibonacci extension) bringing the 1.3140 (78.6% Fibonacci extension) to 1.3150 (23.6% Fibonacci extension) region on the radar.
Additional Market Outlooks
US Dollar Forecast: USD/JPY Bounces Back Ahead of Monthly Low
Canadian Dollar Forecast: USD/CAD Tumbles as Fed Warns of Rate Cut
EUR/USD Under Pressure After Failing to Test Monthly High
Australian Dollar Forecast: AUD/USD Approaches Monthly Low
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
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