Day traders of the GBP/USD need to know that trading in Forex on Monday will be extremely light globally. Major holidays are being observed in Britain and the U.S. and elsewhere.
This coming week’s trading which will be shortened because of the major holidays tomorrow, will nevertheless likely see a sea of volatility and high volumes emerge on Tuesday and the remainder of the week for the GBP/USD and the broad Forex market. Risk appetite is going to be tested abruptly in the coming days, this as the emergence of a possible deal between the U.S and Iran makes news.
Three different types of impetus will hit the sentiment of financial houses dealing with the GBP/USD this coming week. U.K political drama will continue and Keir Starmer’s hold on his Labour Party will be questioned, the U.S. Fed will have a spotlight shined on it as analysts question what the U.S. central bank’s outlook will be, this as the Iranian situation makes noise regarding a potential agreement and deescalation of current circumstances.
The GBP/USD above the 1.34300 mark is a good sign, but likely not a place many financial institutions were wagering on a few months ago. The GBP/USD is still within lower realms in its mid-term range. Before the start of the Iranian war the currency pair was near the 1.34950 mark with a sea of volatility hitting. 0n the 26th of February the GBP/USD was above the 1.35500 level.
This coming week for the GBP/USD will prove to be volatile. Day traders are advised to be cautious. Tuesday’s price action upon the return of major trading desks in Europe and North America will be strong and solid risk management is going to be needed.
- Not only will retail traders be wagering on the GBP/USD on Tuesday and the remainder of the week, so will large players who may believe the GBP/USD is in oversold territory.
- The question is if the GBP/USD has still been discounted due to the Iran war?
- If the price of WTI Crude Oil sees a dynamic drop in price this coming week, what will that do to mid-term outlook regarding the U.S. Federal Reserve and interest rate policy?
- Does this mean large players and financial institutions will lean into a more positive outlook for the GBP/USD and prove to be buyers?
- There are a lot of questions about to be answered this week, particularly if the Trump administration sells the idea that a resolution with Iran is going to take place.
- Buyers of the GBP/USD may feel reinvigorated, and price velocity is a near certainty.
Speculative price range for GBP/USD is 1.34150 to 1.36800
While tomorrow’s trading in the GBP/USD will be uncomfortably quiet for day traders, they should certainly watch tomorrow’s price action coming from Asia. If major Asian equity indices and currencies show bullish behavior on Monday, this will set the stage for a big show on Tuesday in the GBP/USD and broad Forex markets. The GBP/USD has been facing headwinds for a myriad of reasons the past few months, many of these conditions in theory still exist. Traders should be careful tomorrow if they engage, spikes may appear.
Behavioral sentiment may be about to shift quite violently and if this occurs and positive momentum regarding risk appetite springs forth, the GBP/USD may respond with buying and this could remain a factor throughout the week. Day traders should be extremely careful because price velocity, intraday movement and reversals will be a factor. If the GBP/USD lurches above the 1.35000 realm and sustains action there this will be a sign that big players are gambling on a more positive outlook.
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Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.
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