The dollar steadied against a basket of currencies on Friday after softer-than-expected inflation data saw the greenback sink to one-month lows, amid increased bets that the Federal Reserve will cut interest rates in September. The British pound was flat, with the GBPUSD pair moving little after rallying to a near one-year high against the dollar on Thursday. The pound was also buoyed by data on Thursday which showed the British economy grew more than expected in May.
The British pound welcomed the softer U.S. CPI numbers and the dollar’s decline, by sharply rising towards the target level of 1.2975. Here, the bears will have a final chance to intercept the situation on a weak divergence with the Marlin oscillator. If the price breaks above 1.2975, the oscillator’s signal line will be above its peak from May 27-28, eliminating the chances of forming a divergence. This would open up a brilliant prospect for the pound to rise towards the target range of 1.3124/41, determined by the July 2023 peak. The price has about a 40% chance of returning below 1.2847. However, this return would solidify the lower level divergence and realign the pound towards a decline to 1.2633.
CURRENTLY GBP/USD IS MOVING ON UP TREND.
Expecting correction up to 1.2925
Today’s important levels for trading are 1.2856, 1.2903, 1.2960 and 1.3007
Trading Strategy for today: Buy On Dip
Trade setup:
Pullback Buy around 1.2925, Deeper Buy around 1.2895
Safe swing sell below 1.2850
Safe swing buy above 1.2975