GBP/USD Weekly Market Outlook: US Data and Geopolitical Risks

GBP/USD Market Analysis

The GBP/USD pair closed the previous week with losses, influenced by ongoing geopolitical tensions in the Middle East. While official diplomatic negotiations between Tehran and Washington remain stalled, market sentiment remains sensitive to reports regarding potential nuclear policy disagreements.

Macroeconomic Outlook

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Market attention shifts to upcoming US economic indicators, including the ISM index, JOLTs job openings, and Non-Farm Payrolls (NFP). Despite the release of these reports, historical trends from the past 2.5 months suggest that the market often discounts macroeconomic data in favor of geopolitical developments and central bank policy outlooks.

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Official forecasts for April Non-Farm Payrolls stand at 73,000, following a March figure of 178,000. While strong labor data could offer temporary support to the USD on Friday, the medium-term fundamental outlook remains bearish for the dollar. Persistent downward revisions in US employment data continue to dampen expectations for a robust labor market recovery.

Technical Review and Forecast

Average volatility for the GBP/USD pair over the last five trading days is 97 pips. The pair is expected to oscillate within a range of 1.3477 to 1.3671 on Monday, with the linear regression channel suggesting a prevailing bearish trend. The CCI indicator recently signaled a pullback from overbought territory.

Key technical support levels are identified at 1.3550, 1.3489, and 1.3428. Resistance levels are established at 1.3611, 1.3672, and 1.3733. Investors are advised to monitor the price position relative to the 20-period moving average to gauge short-term trend momentum.

Trading Strategy

Fundamental factors, including current US policy, suggest continued pressure on the dollar. Long positions targeting 1.3916 remain viable while the price stays above the moving average. Conversely, should the pair trade below the moving average, short positions targeting 1.3477 and 1.3428 may be considered on a technical basis.

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