**GBP/USD Weekly Outlook: June 10-14, 2024**
*Original analysis by ActionForex.com team*
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**Summary**
The GBP/USD pair closed the week on a strong note, with bullish momentum dominating the currency pair’s trajectory. However, traders are eyeing a pivotal week ahead as it could define the near-term direction. All eyes are on whether recent upward movement will extend or a correction could be on the horizon.
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**GBP/USD Weekly Performance Review**
– GBP/USD ended the previous week above the 1.2700 mark, signaling persistent buying interest.
– The pair managed to resume its recent rebound, benefiting from a weaker US dollar index and solid economic performance out of the UK.
– Despite earlier uncertainty, the pound’s resilience, alongside solid labor market and services sector data, provided further support.
**Key Drivers Last Week**
– **US Dollar Weakness:** The greenback struggled amid softer-than-expected US macro data, including softer NFP, leading to dovish bets over the Federal Reserve’s next moves.
– **UK Economic Data:** Better-than-forecast UK PMI services data and a resilient labor market pushed expectations that the Bank of England will not be hasty in easing policy.
– **Risk Sentiment:** Optimism in global markets, reduced fears around UK politics, and a lack of immediate geopolitical headlines allowed risk assets like GBP to advance.
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**Technical Analysis**
*Bulls maintained their grip, but proximity to technical resistance brings caution.*
**Daily Chart Observations**
– GBP/USD traded firmly above both the 20-day and 55-day Exponential Moving Averages (EMAs), with the 20-day EMA acting as dynamic support throughout the week.
– The pair’s rebound from beneath 1.2600 gathered steam, and GBP/USD approached mid-term resistance at 1.2816, the May swing high.
– Relative Strength Index (RSI) readings on the daily chart pushed toward overbought levels, suggesting momentum remains upward but vulnerability to pullbacks is present.
**Weekly Chart Insights**
– The weekly close above 1.2770 strengthens the case for further bullish follow-through.
– Weekly momentum indicators confirm the uptrend, as MACD line crossed above the signal, reinforcing positive sentiment for the pound.
– Major horizontal resistance can be seen near 1.2827, aligning with a medium-term key swing.
**Short-Term Supports and Resistances**
– **Immediate Resistance:** 1.2816 (May high)
– **Psychological Level:** 1.2850
– **Major Resistance:** 1.2892 (2024 high)
– **Initial Support:** 1.2686 (20-day EMA), followed by 1.2670 (recent swing low)
– **Stronger Support:** 1.2612 (June low), then 1.2580
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**Near-Term Outlook**
*Momentum favors continued buying, but traders should note several caveats going into next week.*
**Bullish Factors**
– The technical structure leans bullish in the near term, with higher highs and higher lows persistently forming since late May.
– US dollar softness amid increased rate-cut speculation continues to weigh on the greenback, supporting cable’s rally.
– The UK economic calendar is relatively light, removing the risk of major downward surprises for the pound.
**Bearish Factors / Risks**
– The pound faces strong resistance in the 1.2820-1.2850 area, which capped several rallies in Q2.
– Overbought conditions, as indicated by RSI, suggest scope for profit-taking or corrective dips.
– Political risks remain in the background ahead of the UK general election, though impact is mild for now.
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**What to Watch Next Week**
*Upcoming developments could be crucial in deciding whether GBP/USD extends gains or starts a correction phase.*
**Key Events/Catalysts**
– **US Federal Reserve Meeting:** Markets await clarity on the timing and magnitude
Read more on GBP/USD trading.