Recently, the US inflation rate has been on the decline, leading to speculation that the Federal Reserve might cut interest rates. This has resulted in a bearish sentiment towards the dollar, causing major currency pairs to approach critical levels that could potentially trigger new trends. Looking at the technical analysis of GBP/USD, there is a possibility of retesting the July high at 1.3050. A bullish engulfing pattern on the daily timeframe indicates a strong upward momentum. If the buyers manage to hold above 1.3000, we could see the price extend towards last year’s highs around 1.3140-1.3100. However, a rejection from 1.3000 might lead to a corrective decline towards 1.2900-1.2800. Key events to watch for GBP/USD pricing include a speech by FOMC member Bostic today at 20:35 (GMT +3:00), UK Public Sector Net Borrowing data tomorrow at 09:00 (GMT +3:00), and the release of FOMC meeting minutes tomorrow at 21:00 (GMT +3:00).
The volatility in yen pairs remains high, especially after a sharp rise in July followed by a recovery by yen sellers. Technical analysis of GBP/JPY suggests the potential for further decline as a bearish harami pattern has formed post a bounce from 192.00. If the recent low at 188.30 is breached, the downtrend could continue towards 186.00-184.00. However, if the price rises above 192.00, a deeper upward correction might be possible. Key news impacting GBP/JPY includes Japan’s Trade Balance (seasonally adjusted) and Import and Export figures for July, both scheduled to be released tomorrow at 02:50 (GMT +3:00).
The recent developments in US inflation and the labor market have had a significant impact on the forex market, especially on major currency pairs like GBP/USD and GBP/JPY. It is crucial for traders to closely monitor key events and technical indicators to navigate through these uncertain times and make informed decisions. The potential for new trends and corrections highlights the importance of staying vigilant and adaptable in the ever-changing forex trading landscape.