GBP/USD is on a bullish momentum, aiming for the 1.2800 level after a strong performance on Thursday. The pair faces potential resistance at 1.2780, with improving risk sentiment likely to support further recovery heading into the weekend.
The Market Today
After hitting a low below 1.2700 on Thursday, GBP/USD reversed its losses and closed in positive territory, continuing its upward trend in the European session on Friday.
The US Department of Labor’s report on declining unemployment claims boosted the US Dollar initially, causing GBP/USD to dip. However, as risk appetite improved later in the day, the USD lost ground, with Wall Street experiencing significant gains.
US stock index futures are currently up, indicating a positive market sentiment. If this trend continues, the USD may struggle, allowing GBP/USD to extend its recovery. On the other hand, geopolitical tensions could impact market flows over the weekend, potentially affecting GBP/USD’s performance.
Technical Analysis
GBP/USD broke above a descending trend line and the RSI indicator on the 4-hour chart, signaling a bullish outlook in the short term. Key resistance levels include 1.2780, 1.2810, and 1.2830-1.2835, while support levels are at 1.2710, 1.2670, and 1.2620.
Insights on Pound Sterling
The Pound Sterling (GBP) is the oldest currency globally and the official currency of the UK. It accounts for 12% of all FX transactions, with key pairs being GBP/USD, GBP/JPY, and EUR/GBP. The BoE’s monetary policy decisions significantly impact GBP’s value, with interest rate adjustments playing a crucial role. Economic indicators like GDP, PMIs, and trade balance also influence the Pound Sterling’s performance.
Overall, GBP/USD’s current bullish momentum and potential resistance at 1.2780 indicate a positive outlook for traders. Monitoring market sentiment, economic data releases, and geopolitical developments will be crucial in assessing the pair’s future movements.