EURUSD & #GBPUSD: Weekly Forecast 27th November – 3rd December2022

GBP/USD: Weekly Forecast 27th November – 3rd December

The GBP/USD provided a whirlwind of gains late last week, as the currency pair responded to data and fiscal rhetoric with an additional bullish run.

The GBP/USD provided a whirlwind of gains late last week, as the currency pair responded to data and fiscal rhetoric with an additional bullish run.

The GBP/USD went into the weekend around the 1.20860 ratio, this after fighting for value around 1.18725 on Wednesday the 23rd of November. Prior to making its bull rush upwards on late Wednesday, the GBP/USD had actually performed with a solid result as it sustained value above intriguing support levels hinting that the currency pair would not sink to lower depths.

Economic data on Wednesday via Service and Manufacturing PMI statistics from the U.K and U.S came in with recessionary shadows. And then the U.S Federal Reserve Meeting Minutes were published which underscored the belief among financial trading houses the U.S central bank would begin to soften its tough hawkish interest rate rhetoric.

Upon the publication of the Fed report, it clearly showed that important decision-makers on the central bank committee believe the time is approaching to become more dovish. As soon as financial institutions saw the Meeting Minutes information, the GBP/USD started to be bought with conviction and broke the 1.20000 ratio and sustained value above.

The Trend is Bullish for the GBP/USD but as always Caution should be used

After moving higher with solid price velocity on Wednesday the GBP/USD continued to incrementally climb. However, reversals certainly did start to be seen lower, which produced what could almost be considered a practical showcase of technical trading in a higher price range. On Thursday when the U.S was celebrating its Thanksgiving holiday and trading volumes were quite limited, the GBP/USD did flirt above the 1.21000 mark and touched the 1.21540 level briefly.

• The ability to touch the 1.21000 level and above is significant. However as thin holiday trading became the norm on Thursday and Friday, the GBP/USD did start to see cautious trading take place which means the start of trading this week should be monitored closely.
• As American financial houses climb back into their trading seats, behavioral sentiment will likely be rather volatile on Monday and Tuesday of this week and trading volumes will grow.

Technical Bullish Trend and a Potentially Clearer Outlook regarding Central Bank Policy

The GBP/USD is now trading at values not seen since August of this year. After suffering a dynamic selloff in the midst of U.K government chaos, the GBP/USD has recovered and is now close to its lower price range which it bounced along before the U.K government meltdown. Is the bear trend now officially dead? It might be.

Support levels this coming week should be watched carefully, but if the 1.20000 mark holds this week and next, this may be a solid indicator regarding the GBP/USD for the mid-term. Having gained so extraordinarily well this past Wednesday and maintaining its stronger stance, the GBP/USD should be watched closely. If financial houses really believe the end of the ‘hawkish’ Federal Reserve is in sight, the GBP/USD may be able to sustain its newfound bullish stance.

GBP/USD Weekly Outlook:

Speculative price range for GBP/USD is 1.18720 to 1.22870

Remarkable gains were made last week in the GBP/USD and traders who believe that there will be reversals lower need to be careful. The return of full trading volume early this week will provide an immediate test of value in the GBP/USD, if certain financial houses believe the GBP/USD gained too rapidly. If the 1.20000 is broken lower, the 1.19800 should be watched, if this ratio is challenged it may be normal to see the 1.19500 mark come under pressure. Sellers looking for lower price levels may be overly ambitious particularly if they believe the GBP/USD will sink under the 1.19000 mark again. Stranger things have happened, but a move to a low of 1.18800 would mean something has taken place that is a surprise.

How much higher can the GBP/USD go this week if last week’s upwards price action can be sustained and support levels hold? Certainly in August and July of this year when looking backward at 6 month charts, the GBP/USD was above the 1.21000 level and 1.22000 marks. However, day traders need to be realistic; a one-way route upward is unlikely. Reversals lower are normal even if the GBP/USD is incrementally moving higher. Stop losses and take profit orders remain key trading ingredients. Targets that are within reach and challenge resistance levels may be the best pursuit for bullish speculators.

EUR/USD: Weekly Forecast 27th November – 3rd December

The EUR/USD will begin this week of trading around the 1.03850 ratio having enjoyed a rather remarkable handful of trading days.

The EUR/USD sustained value last week and then experienced strong buying after the U.S Fed’s Meeting Minutes report was issued on Wednesday.

The EUR/USD will begin this week of trading around the 1.03850 ratio having enjoyed a rather remarkable handful of trading days. On early Monday of last week the EUR/USD was trading near the 1.02250 realm but managed to find important support and then start incrementally climbing. On Wednesday the 23rd of November the EUR/USD was politely traversing the 1.02950 support level when a thrust of buying action suddenly hit Forex.

At the apex of its trading last week on Thursday, the EUR/USD challenged the 1.04500 ratio, but did not break through. The increased buying in the EUR/USD centered on the U.S Federal Reserve’s Meeting Minutes report, which indicated the U.S central bank is likely to begin showing signs of less hawkish interest rate policy. The potential outlook of interest rates being hiked in a more dovish manner added to the ‘positive’ behavioral sentiment in financial houses which have believed a more ‘dovish’ policy was likely mid-term.

Having Established Intriguing Technical Support the EUR/USD should be watched

Having put in rather intriguing technical support levels last week and having delivered an incremental climb higher even before the U.S Federal Reserve’s report, the EUR/USD should be monitored closely. Fundamentally there is still plenty of reason to be suspicious of the EUR, but the potential exist that the European Central Bank will have to increase their interest rates more aggressively compared to the U.S Federal Reserve now.

While betting on the ECB is a dangerous and foolish game perhaps, technically the EUR/USD has also shown that bullish sentiment is developing in the currency pair. Having provided speculators and financial houses the notion that parity is now in the rear view window, the EUR/USD is still within the lower realms of its long term values historically. Support levels near the 1.02000 level should be monitored; this looks like a solid technical depth unless a major surprise was to unfold. The 1.03000 mark below is a key ratio now, and if this level holds it could indicate a more bullish trajectory near-term.

• Traders should keep in mind that full trading volumes will hit the EUR/USD early this week, if the EUR/USD sustains its current price values, this could spur more buying within the forex pair.
• It will be a big week of data in the U.S including GDP numbers on Wednesday and employment and earnings statistics on Friday. Because of the data and current technical values, volatility could develop in the EUR/USD particularly if it is managing to sustain its higher price range.

EUR/USD Weekly Outlook:

Speculative price range for EUR/USD is 1.02800 to 1.05280

Support levels will prove very important on Monday and Tuesday. Full trading volume in the EUR/USD has not been seen since Wednesday of last week. If current values continue to test early July 2022 ratios, traders looking for downside price action may want to reconsider being aggressive. If the EUR/USD moves lower, but stays above the 1.03000 mark, traders inclined to be sellers should be cautious and not be overly ambitious. A move below the 1.03000 level would be surprising technically, and if there are no major ‘news events’ this could be a solid place to look for reversals higher.

The EUR/USD is still within the lower depths of its long-term price range. The bearish trend that it has endured has been long and brutal for traders attempting to look for reversals higher. However, recent price action since early November seems to have established an incremental climb, which actually began to show signs of emergence in late September when the EUR/USD sputtered to a low of nearly 0.95300. If the EUR/USD can stay above the 1.03500 level early on Monday and maintains a value, buyers may believe there is additional room to explore upwards. A move above the 1.04000 mark that is sustained could ignite more bullish sentiment near-term. From a speculative wagering perspective, it appears the EUR/USD may be worthwhile as a buying opportunity while using solid risk-taking tactics.

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