Currently, the GBP/USD market is trying to find a nearby support level after being rejected at the $1.24994 price level. If the bulls succeed in securing support at the $1.24459 price level, the narrow price channel will result in more pressure on the key resistance. The increase in the GBP price may be due to the current crisis in the U.S. economy. However, a certain corrective measure has been put in place to see to the recovery of the US dollar, and this may be the reason why the market is facing rejection at the key resistance level.
The Market from the Daily Chart Point of View
Since early March, the market has been trading within the ascending price channel, with the price action maintaining its position above the 20-day moving average of the daily chart. This shows that the market holds a bullish sentiment. In support of this, the Relative Strength Index measures the market momentum at around level 63.
The GBP/USD Market From the 4-Hour Chart Point of View
The new support level at the $1.24459 price level, which is above the 20-day moving average on the daily chart, is actually below the 20-day moving average on the 4-hour chart outlook on the market. But this support level is just slightly below the moving average line. If the current 4-hour session closes near this support price level area, we may see GBP/USD gain traction from this place to meet up with the bearish stronghold at $1.24994.
Fundamental Overview of GBP/USD
Although GBP seems to be rising due to the fall of the US dollar, the dollar has been able to recoup some of its early-week losses by Wednesday. Following the unsatisfactory macroeconomic data release from the U.S., investors have begun to seek shelter because of fresh worries about the declining economy. The GDPNow estimate for the first quarter from the Federal Reserve Bank of Atlanta decreased from 1.7% on April 3 to 1.5%. This data supports investors’ worrisome sentiment about the declining US economy.
The information from the United Kingdom on Thursday morning showed that Halifax House Prices increased by 0.8% in March. This is a surplus over the expectation of a 0.3% fall. Meanwhile, the year-ahead inflation outlook decreased to 5.8% from 5.9% in the February release, according to the Bank of England (BoE) Monthly Decision Maker.
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