The Greenback hit a shock resistance yesterday, significantly pushing the GBPUSD further into a bullish pullback. The weakness of the USD, though, might be related to the rumors of intervention by the Bank of Japan. The focus now shifts to the FOMC rate decision meeting on Wednesday, when the intermediate future of the greenback will be potentially determined.
Key Points
- The pair’s bullish correction continues as the USD encounters a minor selloff, possibly due to the BoJ intervention.
- The FOMC interest rate decision meeting on Wednesday and Employment data on Friday may determine the immediate direction of the pair.
- The price remains in a range between the 1.25045 support and 1.25528 resistance.
GBP/USD Daily Price Analysis – 30/04/2024
The Pound continued its recovery against the dollar with a forceful 0.54% move to the upside on Monday. Today’s Asian session has opened with the USD regaining some strength, humbling the pair by 0.2%.
Monday’s bullish move, however, is suspected to have had more to do with the Japanese Yen. It is possible the Japanese Central Bank finally made good on its promise to intervene should the Yen continue to take a beating against the USD. The BoJ has not yet confirmed or rejected this, though. However, intervention or not, the effect was felt across the board, as the US Dollar Index, which measures the strength of the USD relative to six major currencies, lost 0.43%.
This GBPUSD upside may be capped, though, as there are expectations that the United Kingdom will cut its rates ahead of the United States. The rate differential could put the Greenback on the front foot once again. However, nothing is a given, as sticky inflation has plagued the United States amidst a slowing economy. Last Friday’s Core PCE price index suggested that inflation is still on the high, while the GDP data from the previous day was much lower than expected.
Looking ahead, the FOMC meeting on Wednesday will be in the spotlight before an audience of analysts, economists, and investors. Although the US interest rate is widely expected to remain unchanged this month, all concerned players will scrutinize the event for any signs of dovishness or hawkishness.
Considering the technicals, investors have more reason to be cautious with the pair. The price sits just below the 50EMA, and the RSI line floats towards the 50.00 mark. According to these tools, the outlook remains neutral.
GBP/USD Technical Analysis – 30/04/2024
A continuous pullback of the pair continues to give the short-term bulls reason to be positive. The price has now crept past the midway point between the April 9th swing high and the April 22nd swing low. It sits right between the 0.618 (1.25528) and 0.5 (1.25045) Fibonacci retracement levels and just above the 50 EMA.
If this 50 EMA line is not enough support to continue the recent upside movement, the 0.5 (1.25045) Fib level may do the job. This could potentially push the price past 0.618 (1.25528) and towards the 0.786 (1.26217) Fib levels.
Conversely, it’s not yet certain when or if this pullback will end soon. If the price does make a U-turn to continue its overall downward movement, it has to go through the 0.5 (1.25045), 0.382 (1.24561), and 0.236 (1.23962) Fib support levels.
Key Economic Data and News to Be Released Today
In the absence of any top-tier news event from the United Kingdom today and, to some extent, on Wednesday, the event-laden USD may be a bigger driving force in the pair.
Today, the Chicago PMI and CB Consumer Confidence reports get released today. And on Wednesday, the focus shifts to the FOMC and its interest rate decision meeting. While expectations are that the interest rate will remain the same for this month, investors will still be looking for signs of dovishness or hawkishness.
GBP/USD Key Fibonacci Price Levels 30/04/2024
Based on the 1hr chart, the key Fibonacci Price levels for the GBPUSD are these:
| Support | Resistance |
| 1.25045 | 1.25528 |
| 1.24561 | 1.26217 |
| 1.23962 | 1.27095 |
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