The US dollar strengthened following Trump’s victory, pushing the GBPUSD currency pair down to 1.2487, its lowest level in six months, before closing at 1.2528. The pound has dropped 2.86% this month and 1.59% since the start of 2024, with its performance under pressure due to the more robust US economy. In contrast, the UK faces challenges like stagnant productivity, rising inflation (up 2.3% in October), and higher energy bills. Investors now expect the Bank of England to make three rate cuts in 2025, with a February cut fully priced. Until the UK economy improves, the pound’s struggle against the dollar will likely continue. Here is a breakdown of the analysis performed on GBPUSD during our weekly market review session on the Telegram channel.
GBPUSD – D1 Timeframe
On the daily timeframe chart of GBPUSD, we see the price being rejected off the confluence region of the trendline support and the drop-base-rally demand zone. There is also a daily timeframe pivot zone on the scene, as highlighted by the two horizontal red lines. Let’s dive into the 1-hour timeframe to recount the required entry confirmation.
H1 Timeframe
The required trigger for the buy on the 1-hour chart of GBPUSD would be a break above the previous high and the trendline resistance. The arrowed lines indicate the path I expect the price to take to complete the required confirmation.
Analyst’s Expectations:
- Direction: Bullish
- Target:1.27676
- Invalidation: 1.24381
