**GBP/USD Weekly Outlook: June 10-14, 2024**
*Based on analysis by actionforex.com; original author credit: ActionForex.com*
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## Overview
The British Pound (GBP) endured notable volatility against the US Dollar (USD) over the past week. GBP/USD initially showed resilience, recovering some lost ground early on. However, upside momentum faded, and the pair ultimately retreated. This cautious market tone reflects ongoing uncertainty ahead of key data releases and significant central bank events. The coming week is set to be pivotal, as market participants closely monitor macroeconomic indicators and monetary policy signals from both the UK and the US.
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## Technical Outlook
### Price Action Analysis
– **Early Recovery:** The GBP/USD pair started last week with modest gains, registering a rebound from recent lows as market sentiment sought direction from mixed economic data.
– **Resistance Encountered:** Momentum stalled near the 1.2800 handle, failing to break through this key resistance zone.
– **Late Weakness:** Subsequent sessions saw renewed selling pressure, erasing early-week gains and closing the pair lower near the 1.2700 mark.
– **Range-Bound Trading:** The price remained confined within a tight medium-term range between 1.2680 and 1.2810, underscoring indecision among traders.
### Support and Resistance Levels
– **Immediate Support:** 1.2690-1.2700 (recent swing low, coinciding with early June levels)
– **Next Support:** 1.2620 (psychological floor and previous monthly low)
– **Major Support:** 1.2530 (year-to-date support zone)
– **Immediate Resistance:** 1.2800 (significant technical barrier)
– **Next Resistance:** 1.2815-1.2820 (recent highs, previous area of supply)
– **Major Resistance:** 1.2900 (major psychological level and multi-month resistance)
### Technical Indicators
– **Moving Averages:** The pair continues to trade above the 55-day Exponential Moving Average (EMA), signaling that the medium-term uptrend remains intact, albeit losing strength.
– **Momentum Oscillators:** The Relative Strength Index (RSI) is hovering below the midline, reflecting waning bullish momentum but not yet indicating an oversold scenario.
– **MACD:** The MACD histogram is beginning to reduce positive divergence, suggesting a pause in upward momentum.
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## Fundamental Outlook
Fundamental drivers continue to shape market sentiment for GBP/USD, with a focus on central bank policies, macroeconomic data releases, and overall risk appetite.
### United Kingdom Developments
– **Monetary Policy:** The Bank of England (BoE) remains cautious regarding rate changes, opting for a “higher-for-longer” narrative on interest rates amid elevated inflationary pressures. Recent policymaker commentary has toned down hawkish rhetoric, reflecting uncertainty about the economic outlook.
– **Economic Data:** UK data releases were mixed. A moderate expansion in service sector activity supported the pound initially, but lackluster retail sales and ongoing headwinds from high living costs limited upside.
– **Political Uncertainty:** Speculation ahead of the upcoming general election, set for July 4, adds an extra layer of caution, as investors balance the prospects of fiscal policy shifts with the BoE’s independence.
### United States Developments
– **Federal Reserve Policy:** The Federal Reserve (Fed) sent mixed signals, with several policymakers hinting at patience before rate cuts amid sticky inflation. The dot plot from the upcoming FOMC meeting is likely to be scrutinized for clues about future monetary direction.
– **Inflation and Labor Data:** Economic prints showed US inflation remaining above the Fed’s 2 percent target, while job growth remained steady. Nonfarm payrolls exceeded expectations, further reducing near-term rate cut bets.
– **US Dollar Strength:** Renewed USD strength capped rallies in GBP/USD
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