#GBPUSD,#USDCHF,#EURUSD: Weekly Forecast (3-9 December 2023)

Posted by Clara Mellor on 04:36 with No comments

GBP/USD:

The GBP/USD was trading near the 1.26150 mark on Friday which may have set off alarm bells among cautious speculators, this as Tuesday’s and Wednesday’s highs above the 1.27000 level seemed as if they would vanish into the sunset. Having started last week near the 1.25900 ratio, the gains made early in the week continued the bullish momentum that dominated November’s trading. The sudden move lower on Thursday and early Friday may have cost some traders money if they remained long in the GBP/USD while betting on additional ambitious climbs in value from the currency pair.

Look at a Six Month Technical Chart and Outlook for GBP/USD

In ten days the U.S Federal Reserve will release their FOMC Statement. Then on the next day, the Bank of England will issue their Official Bank Rate and Monetary Policy Summary. Neither central bank is expected to surprise financial institutions. The gains in the GBP/USD have developed in the past month as financial institutions have acted on their belief the British Pound had been oversold. Interest rates via government bonds appear calm for the moment.

Looking backward the GBP/USD was trading at its current levels late in August and early September, but the values seen in the summer occurred as the currency pair was suffering a bearish trend. The GBP/USD was trading near the 1.31450 vicinity in the middle of July 2023. Speculators who were looking at six-month technical charts late last week, and dreaming of higher values may have been hurt by the strong reversal lower which occurred on late Thursday and into Friday. Behavioral sentiment remains vital in the GBP/USD and looking forward risk appetite globally will affect the direction of the currency pair.

Data Overshadowed by Broad Market Results as Momentum Dominates

  • U.S equity indices are near highs and U.S Treasury yields continue to trend lower, displaying risk appetite is likely still building.
  • The USD has been weaker against many major currencies including the GBP.
  • U.S jobs numbers will be published this Friday and impact Forex including the GBP/USD.
  • However it is the Fed and BoE statements which will come on the 13th and 14th of December, that many financial institutions are gearing their outlooks to, this as they think about the next few months.

GBP/USD Weekly Outlook:

The speculative price range for GBP/USD is 1.26390 to 1.28010

Yes, the 1.27000 may prove important early this week. Traders however should understand that reversals lower are a natural part of Forex and betting on a blind upside is a mistake. While the bullish sentiment within the GBP/USD is attractive, speculators should use their risk-taking tactics carefully. If the 1.27000 proves durable in the near term for the GBP/USD, this will set the table for the potential of further explorations upward. The GBP/USD traded near the 1.27340 ratio this past Wednesday. Lower moves to 1.26900 and 1.26800 should be watched to see if these support levels prove durable.

If the GBP/USD begins to challenge last week’s highs and sustains value around 1.27300 it will be a bullish signal, but before the U.S jobs numbers on Friday, the currency pair will get plenty of impetus from existing behavioral sentiment and volatility could develop. Traders should watch the yields on U.S Treasuries, if declines continue to occur in the U.S bonds via yields this will be a sign financial institutions continue to position for greater risk appetite in U.S equities. Traders should not get too confident and be willing to cash out winnings should they develop. Speculators who want to bet on downside movement via reversals when technical highs have been hit should certainly use quick-hitting take-profit orders.



USD/CHF


The US dollar has fallen rather significantly during the course of the trading week against almost everything, and the Swiss franc was no different. The market has tested the 0.87 level, and it did break down below there just a little bit. All things being equal, the market is likely to continue to see plenty of negative pressure if we continue to see a lot of downward pressure in yields when it comes to the United States. If we do see the bond market continue to see a lot of downward pressure, then I think the Swiss franc will continue to benefit. That being said, look for a short-term bounce that you can start fading on the first signs of exhaustion.



EUR/USD

The euro initially tried to rally during the course of the trading week but found the 200-Week EMA near the 1.10 level as a major barrier. By pulling back from that level, it shows that we continue to see a lot of volatility. Underneath, the 1.0850 level is a significant support level that we need to pay close attention to, and therefore I think it’s a situation where we continue to trade in this area, but if we were to break down below the bottom of the candlestick, then it’s possible that we could drive down to the 50-Week EMA. On the other hand, if we were to break above the candlestick for the week, then it opens up the possibility of a move to the 1.1250 level.



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