Having seen a high around the 1.36450 mark on Wednesday, the GBP/USD went into this weekend around 1.36274. The currency pair has been correlating to the global Forex market in a straightforward manner per USD centric sentiment depending on what time of the day it is.
While that sentence may seem to be a bit of a tease, the attitudes of Forex traders are certainly being shaped by the shifting sentiment of financial institutions as they react to the constant flow of noise coming from the Middle East conflict and rhetoric from the U.S White House.
As the price of WTI Crude Oil has seemingly entered a more polite realm, risk appetite in the global markets has also turned up a notch. USD centric weakness has been sustained and the GBP/USD ability to keep value above the pre-Iran war dates of early March can be seen technically. The GBP/USD is now testing a realm it last saw on the 16th and 17th of February.
Dynamic Range in the GBP/USD
Tomorrow’s start of the week for the GBP/USD will be affected by existing sentiment regarding the Middle East conflict which remains tentatively calm, but it might also be influenced by reactions to the local elections which took place throughout Britain late this past week. The U. K’s Labour Party took a thrashing in the polls, and this reflects very poorly on its current leadership, which looks like it might be in peril. Financial institutions may react to the election results rather intriguingly on Monday because of the results.
While the leadership of the Labour Party might be called into question, it is also going to be interesting to see if financial institutions look upon the results as a moment in which their outlooks are confirmed regarding future U.K leadership. Day traders need to brace for the potential of dynamic prices in the GBP/USD early on Monday as London trading opens early in the day.
Higher Marks in the GBP/USD and Correlations
The higher values in the GBP/USD may continue into the coming days. If market sentiment keeps the USD within it weaker framework in the broad Forex market it will certainly help generate GBP/USD buying. Technical traders will be looking at early February marks and perceive them as targets perhaps.
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The 1.37000 mark still may be too far away.
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Day traders should not get overly ambitious, and they should aim for more polite realms within striking distance for the GBP/USD which will not leave them open to intraday volatility.
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It also may prove practical for cautious traders to stay away from the opening of the GBP/USD as financial institutions generate Forex results based on their viewpoints regarding British politics.
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While the current government remains in power, it looks as if many folks will have a reason to believe a change is going to take place, but GBP/USD trading will be based on mid-term outlooks, which will likely include the current government’s mandates.
GBP/USD Weekly Outlook:
Speculative price range for GBP/USD is 1.35700 to 1.37300
The give and take of the current circumstances driving the value of the GBP/USD are attractive for day traders. The currency pair certainly offers price action which can be wagered upon. After tomorrow’s early trading fades the GBP/USD should see calm trading, but speculators must still brace for the possibility of sudden news developments from the Iran war and domestic political noise coming from the U.K which is certain to be heard.
The ability of the GBP/USD to maintain its higher stance may be seen as attractive and a place for higher values to be wagered on in the coming days. If the GBP/USD sustains values above the 1.36300 to 1.36400 levels on early Monday, then looking for additional upside in the coming days might become the thinking amongst financial institutions and larger players. But even large players in the GBP/USD will remain vulnerable to the potential of conflicting noise suddenly developing. Forex markets have proven difficult the past few months, and they are not likely to get too comfortable quite yet.
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Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.
As seen on: Investing.com, TalkMarkets, Angry MetaTraders
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