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Introduction to GBP/USD

The GBP/USD currency pair, often referred to as “Cable,” represents the exchange rate between the British Pound (GBP) and the US Dollar (USD). It is a major forex pair influenced by economic data releases, central bank policies, and geopolitical events from both the United Kingdom and the United States.

GBP/USD Market Overview

The analysis of GBP/USD on June 12, 2024, is heavily influenced by several key US economic indicators. Among the most important are the Core Consumer Price Index (CPI) m/m and CPI m/m figures, both of which are critical measures of inflation. The market expects the Core CPI to remain steady at 0.3%, while the overall CPI is expected to drop to 0.1% from the previous 0.3%. The year-over-year CPI is anticipated to stay consistent at 3.4%. Additionally, the Federal Funds Rate is expected to remain unchanged at 5.50%, with the release of FOMC Economic Projections and the Federal Budget Balance adding further context to the USD’s strength.

GBP/USD Technical Analysis

The GBP/USD H4 chart shows that the pair is currently testing a significant resistance level, with candlestick patterns around this zone indicating potential weakening of bearish momentum. This setup suggests the possibility of a reversal or consolidation, which traders should monitor closely to determine the next directional move.

Key Technical Indicators

–Williams %R: The Williams % Range is in oversold territory, indicating bearish conditions. However, this could also suggest that the pair is due for a pullback or consolidation before any further bearish movement, especially as the oversold condition implies a potential for price stabilization or reversal.

– MACD (Moving Average Convergence Divergence): The MACD indicator shows bearish signals, with the MACD line below the signal line and the histogram below the zero line. This setup confirms ongoing bearish momentum but also requires monitoring for any signs of weakening that could signal a shift in trend.

Support and Resistance Levels

– Support Levels: Immediate support is found at the lower points of recent candles around 1.27650. This level is critical for maintaining the current bearish structure.

– Resistance Levels: The nearest resistance is around 1.26870, which corresponds to the upper line of the former bearish channel. A break above this level could invalidate the bearish outlook and signal a potential reversal.

Final Words about GBP vs. USD

The GBP/USD pair on the H4 chart shows signs of bearish momentum but is also testing a key resistance level that could determine the next move. Traders should pay close attention to the economic data releases, particularly the US inflation figures and Federal Reserve announcements, as they will likely have a significant impact on the USD and, consequently, the GBP/USD exchange rate. If the price fails to break the 1.26870 resistance level, the bearish scenario may continue, offering short opportunities. However, a strong push above this level could lead to a bullish reversal, requiring traders to adjust their strategies accordingly.

Disclaimer: The provided analysis is for informational purposes only and does not constitute investment advice. Traders should conduct their own research and analysis before making any trading decisions.*