Cable is consolidating at a key support area ahead of potential catalysts this week.
Will a bounce from the support zone help extend the GBP/USD uptrend?
We are approaching the four-hour time frame for evidence:
GBP/USD currency pair on 4-hour chart Chart by TradingView
In case you missed it, easing political concerns in the UK has helped lift the value of the pound against its major peers.
On the other hand, the growing evidence of a possible interest rate cut in the United States does not serve the US dollar against major currencies.
The GBP/USD pair, which has been in an uptrend since May, hit a 2024 high just below 1.3050 before falling back to the 1.2875 area.
Remember that directional biases and volatility in market prices are usually driven by fundamentals. If you haven’t done your homework on the USD and GBP, it’s time to check out the economic calendar and stay up to date with the daily fundamental news!
Interestingly, the current levels of the GBP/USD pair coincide with the middle of the ascending channel pattern on the 4-hour time frame. Not only that, but they are also not far from the pivot point line, the 100-day simple moving average, and some key resistance levels from earlier this year.
Is GBP/USD ready to extend its uptrend this week?
Watch for bullish candles above the pivot point line. Bullish momentum above the support area opens the way for GBP/USD to move towards Resistance 2 (1.2980) if not the psychological level of 1.3000 or previous highs of 1.3050.
However, it is not unlikely that the downward trend will continue in the second half of July.
If GBP/USD bounces off the pivot point line, or if it continues to trade below the 1.2850 level, the cable could head towards the 1.2800 turning point near the 200 SMA or retest the 1.2750 channel lows before seeing sustained bearish pressure.
What do you think? How far can GBP/USD go before the bulls show up again?