FxNews—Our latest GBPUSD market analysis shows that the currency pair is struggling in a market that’s cautious about taking risks. Despite a slight recovery last week, the GBP/USD currency pair started this week on a weak note, falling below 1.2200.
USD Rises as Tensions in Gaza Stir Markets
Recent events have stirred up the market. Over 1,100 lives have been lost due to conflicts in the Gaza Strip, where militants have taken hostages. This has increased the value of the US dollar (USD) as investors seek safer options. The USD Index rose above 106.50, gaining 0.4% after a three-day decline last week.
Pound Struggles Against Major Currencies Today
Today’s market analysis shows that the Pound Sterling performs poorly against major currencies, notably the New Zealand Dollar. While US bond markets are closed for Columbus Day, stock markets are open as usual. Any changes in Wall Street’s main indexes could affect the USD’s value. If US stocks perform poorly, it could boost the USD’s strength.
In other news, Federal Reserve Governor Michelle Bowman stated that tighter monetary policy may be needed to bring inflation back to a 2% target. This suggests that investors will closely watch risk perception, as no major data releases are expected in the US economic docket.
- Next read: EURUSD Market Analysis – Ichimoku Key Levels
GBPUSD Market Analysis – Pound Struggles vs Major
The GBP/USD pair is currently at a critical juncture. The pair is testing the 1.217 pivot point on the 4-hour chart, a key level that traders around the globe are closely monitoring. The Relative Strength Index (RSI), a popular momentum indicator, is teetering on the edge of the 50 level, adding to the suspense.
The market sentiment for GBPUSD appears to be bearish at this moment. If the bears close below the pivot point on the 4-hour chart, it could signal a potential downtrend for the pair. In such a scenario, we could see GBPUSD embark on a downward journey, with its sights set on the 1.029 support level.
However, every market has two sides, and it’s essential to consider both perspectives in our GBPUSD market analysis. On the bullish side, there’s still hope. To maintain the upward momentum that started on October 3rd, bulls need to push the currency pair above the middle line of the declining channel.