The GBPUSD currency pair is testing annual highs

10 July 2023 144
The GBPUSD currency pair is testing annual highs

The GBPUSD currency pair price is near the annual high of 1.2850 reached on Friday. Last week's US jobs data raised doubts about the strength of the labor market. That made investors more skeptical of the Federal Reserve's plans to raise interest rates.

 

The Labor Department's jobs report on Friday showed a record 2.5-year low of new jobs created in June. That caused U.S. Treasury yields to slump and sent the dollar down nearly 1% against a basket of currencies.

 

The figure was also low in April and May. This indicates that rising borrowing costs prompt employers to slow the pace of hiring.

 

Meanwhile, Janet Yellen, head of the US Treasury Department, said the negotiations with top Chinese officials in Beijing were productive. The meeting helped stabilize the relationship between the two superpowers.

 

Several Fed officials will deliver a speech today. Their remarks might hint at future changes in the US regulator's monetary policy.

 

Meanwhile, persistently high inflation in the UK is increasing market participants' beliefs that the country's central bank will raise interest rates to the highest level in 25 years to 6.5%, before the end of the year.

 

Tomorrow at 6:00 GMT, UK unemployment rate data is released. According to the UK’s Office for National Statistics, the unemployment rate will remain at 3.8%. Any deviation from the forecast will increase the volatility of the British pound.

 

The GBPUSD price is forming an uptrend on the H4 timeframe.

 

In terms of wave analysis, the price is forming the third ascending wave. If the price breaks out the upper boundary of the first wave at the level of 1.2850, it may continue to rise.

 

The RSI (standard values) confirms the current short-term upward direction of the price in convergence.

 

Signal:

The short-term outlook for the GBPUSD pair is to buy

The target is at the level of 1.3170.

Part of the profit should be fixed near the level of 1.2980.

A Stop-loss should be placed at the level of 1.2550.

The bullish trend is of a short-term nature, so it is suggested to limit the trading volume to no more than 2% of your capital.

This content is for informational purposes only and is not intended to be investing advice.

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