GBPUSD pulls back from recent lows, key data risks include Friday PCE Data

As of April 24, 2024, GBP/USD has presented a consolidation pattern above the key psychological level of 1.0700, which might be indicative of a potential base forming in the short term. The currency pair’s recent dynamics have been largely influenced by a softening in U.S. Treasury yields, which, in turn, has applied downward pressure on the U.S. dollar across the board.

From a technical standpoint, the closure above the 10-day moving average (MA) at 1.0660 the previous day could be suggesting a temporary bottom is in place, signifying a short-term bullish bias. This bullish sentiment is further reinforced if we consider the pair’s stability above the 1.0700 handle during trading session, maintaining a tight range and exhibiting a slight uptrend into the afternoon.

For resistance levels, focus is placed on 1.0730/40, where the 20-day MA converges with the 38.2% Fibonacci retracement of the March-April decline. A decisive breakout above the 1.0780 threshold might trigger a more pronounced short-covering rally, hence altering the short-term trend to the upside.

On the support side, the recent five-month low around 1.2390, as indicated by historical data, remains a significant threshold. A sustained move below this level could lead to further bearish momentum, potentially testing the subsequent support at 1.2420.

Market Sentiments:

Positive: 30%
Negative: 50%
Neutral: 20%

The sentiment leans more towards the negative, largely due to the prevailing strength of the USD bolstered by firmer U.S. yields, overshadowing the relatively upbeat UK payroll and wage data. The anticipation of key U.S. economic releases, including the PCE price index on Friday, adds to the cautious stance in the market, as it could potentially reaffirm the hawkish stance of the Federal Reserve, thereby supporting the USD and capping gains for the GBP/USD.

Key Levels to Watch: : 1.2429,1.2010,1.2378,1.2508