- The GBP/USD price analysis shows solid bullish momentum.
- The dollar has remained fragile amid worries about a likely US recession.
- Traders expect at least three Fed rate cuts this year.
The GBP/USD price analysis shows solid bullish momentum as the pound holds near recent peaks due to dollar weakness. The sterling has maintained a bullish rally since the start of March as the dollar collapsed due to US economic worries. At the same time, market participants expect the Bank of England to keep rates unchanged next week.
–Are you interested to learn more about forex options trading? Check our detailed guide-
The dollar has remained fragile amid worries about a likely US recession due to Trump’s tariffs. The US president caused market turmoil last week by implementing new tariffs and suspending some. Traders are worried that his aggressive approach will spark trade wars that will cause an economic slowdown in the US. Decreased trade between the US and its partners means local companies suffer. If this happens, other parts of the economy will decline like the labor sector and consumer spending.
At the same time, recent US data has revealed slower demand, raising expectations for Fed rate cuts this year. On Friday, data showed slower job growth and higher unemployment in February. As a result, traders expect at least three Fed rate cuts this year. The upcoming inflation report will keep shaping this outlook.
On the other hand, market participants expect the Bank of England to keep rates unchanged next week amid the recent economic recovery.
GBP/USD key events today
GBP/USD technical price analysis: Bullish momentum pauses after a steep climb
On the technical side, the GBP/USD price has met a solid hurdle at the 1.2951 level. However, the price still trades above the 30-SMA, with the RSI above 50, indicating a bullish bias. The price rose steeply after breaking above the pivotal 1.2701 resistance level.
–Are you interested to learn more about Thailand forex brokers? Check our detailed guide-
However, the rally has slowed down, and bullish momentum is fading. Price action is confined to a tight range. At the same time, the RSI has made a bearish divergence, suggesting a likely reversal. If bears are ready to take control, the price will break below the 30-SMA and fall to retest the 1.2701 support.
On the other hand, if bullish momentum remains strong, the price will soon break above the 1.2951 resistance. Such a move would clear the path to the 1.3100 key psychological level and a new high in the bullish trend.
Looking to trade forex now? Invest at eToro!
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
