GBP Futures Daily chart – Analysis Made By REVOLVER™ and ISOTRIUMPH™ Indicators.
GBP/USD Turns Bearish: Analyzing the Key Factors Behind Decline
The GBP/USD pair has recently turned bearish after reaching a significant Supply area around 1.3228. This level, clearly visible on the weekly chart, has proven to be a formidable resistance, halting the pair’s upward momentum and reversing its course. As of today, GBP/USD is trading around 1.3125, marking a notable decline from the previous highs.
Today’s economic calendar highlights the USD ISM Manufacturing PMI, a critical indicator of economic health in the United States. As a leading indicator, the PMI reflects the purchasing managers’ outlook, which can offer valuable insights into the overall economic sentiment. Businesses tend to react swiftly to market changes, making this data particularly relevant for understanding the current economic landscape.
In contrast, the UK’s economic calendar is sparse this week, offering little to support the GBP. The lack of high-impact economic data leaves GBP traders focusing on external factors, particularly from the US. The US economic calendar, however, is packed with significant data releases, including the US Purchasing Managers Index (PMI) figures spread throughout the week. However, the spotlight remains on US labor data, with key prints scheduled for Thursday and Friday.
Thursday’s US ADP Employment Change will be the first major data release, serving as a precursor to Friday’s highly anticipated Non-Farm Payrolls (NFP). This week’s labor market updates are crucial as they represent the last significant data points before the Federal Reserve’s rate decision on September 18th.
Before these critical releases, the market will also be watching the US JOLTS job openings, scheduled for Wednesday. The JOLTS data is expected to remain steady near 8.1 million for July, closely aligning with the previous month’s figure of 8.184 million.
Technical and Sentiment Analysis: Indicators of Further Decline
From a technical perspective, the recent rejection from the 1.3228 Supply area signals a potential continuation of the bearish trend. In addition to this, the Commitments of Traders (COT) report reveals an interesting dynamic. Retail traders are currently extremely bullish on GBP, which often serves as a contrarian indicator, suggesting that a reversal might be on the horizon.
Seasonal trends also support the bearish outlook for GBP. Historically, this period tends to favor a continuation of the downtrend, aligning with the current market sentiment and technical indicators.
Conclusion: A Confluence of Factors Supporting the Bearish Outlook
The confluence of technical resistance at the Supply area, bearish seasonal trends, and contrarian sentiment indicators all point towards a continuation of the GBP/USD decline. As the market awaits critical economic data from the US, traders should remain cautious of further downside risks. The alignment of these factors underpins our bearish outlook on GBP/USD, reinforcing the idea that the pair may continue to trade lower in the near term.
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Expert Advisors carry a high level of risk and it is possible to lose all your capital.
Any financial figures mentioned on our site, its affiliates, or in our communications are estimates, projections, or historical results and should not be interpreted as precise, actual, or a guarantee of potential earnings – they are provided solely for illustrative purposes.
It is crucial to understand that past performance of any trading course, service, tool, or product does not assure its future performance in any capacity. Consequently, Forexn1.com cannot be held liable, either directly or indirectly, for any financial loss incurred, regardless of its extent. It is not uncommon for the average purchaser of a forex system to experience a lack of income. Our community does not guarantee income or success, and any examples provided in our presentations should not be interpreted as indicative of future success or earnings. Once again, past performance of an educational product or any service and tool within this website or related social media platforms does not guarantee future performance. Consequently, Forexn1.com cannot be held liable, either directly or indirectly, for any financial loss incurred, regardless of its magnitude. No representation or guarantee of any kind is made that you will or should achieve profits similar to the results demonstrated in any hypothetical or live trade, or product service and tools inside our website, as the purpose is auxiliary educational aids. You should not solely rely on the information contained on this site or on any of our social media channels. It is advisable to independently verify all information provided.
Past performance shown in any demonstrated trade, service, or tool is not indicative of future results. The past performance of any trading system or methodology is not necessarily indicative of future results. Moreover, stated results of any specific trade may be based on simulated or hypothetical performance results with certain inherent limitations. Since these trades have not been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity.
Simulated trading programs, including expert advisors, are also subject to the fact that they are designed with the benefit of hindsight. No representation is made that any account will or is likely to achieve profits or losses similar to those shown in any simulated trade.
All services, including indicators and expert advisors, and any tools we offer should be strictly utilized as auxiliary educational aids. We recommend using them in simulated trading accounts, such as Demo, for educational purposes. By reading this, we do not respond to any of your different choices.
All data provided within the website is intended solely for educational purposes, and any services or tools we offer should be strictly utilized as auxiliary educational aids.
In accordance with applicable law, FOREXN1 Website, its affiliates, officers, directors, managers, employees, or agents shall not be liable for any damages, including but not limited to direct, indirect, incidental, special, consequential, or punitive damages. This includes damages arising from the use of the Website, misuse of educational information presented on the website, any educational service, tool or service, any failure, error, omission, interruption, defect, delay, computer virus, loss of data, loss of use related to the Website or a linked site, or any loss relating to your own personal investment results.
– IMPORTANT RISK NOTICE –
Trading in foreign currency exchange, cryptocurrency, or commodities involves high volatility and significant risk, and may not be suitable for all individuals. The use of margin as leverage further amplifies this risk and can work against you. Prior to investing or trading in foreign currency, cryptocurrency, commodities, or any other market, it is essential to carefully assess your investment objectives, level of experience, and risk tolerance. It is highly probable that you may incur losses, potentially losing some or all of your initial capital. Therefore, only invest funds that you can afford to lose. The value of any trade or investment in the foreign currency exchange market, cryptocurrency, or commodities is subject to extreme volatility, which may result in substantial percentage losses or the complete loss of your invested capital.
The possibility exists that you could sustain a loss of some or all of your initial investment, and therefore, should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
All services, including indicators and expert advisors, provided by us should be used solely as supplementary educational resources. We recommend utilizing them in simulated trading accounts, such as Demo, for educational purposes. Please note that by reading this, we do not endorse any specific trading decisions or actions.
Read our full term and conditions here: https://forexn1.com/terms-conditions/