GBP/USD – The Bullish momentum seems to be weakening for the Cable Pair
Take Profit: 1.2400
Stop Loss: 1.2570
Timeline: 1-2 days
Buy Stop: 1.2525
Take Profit: 1.2650
Stop Loss: 1.2425
The DXY rising to $101.87 caused a drop to 1.2500 as the cable pair experienced a pullback. The collapse of First Republic Bank following the release of weak US manufacturing output data led to a rebound for the index as investors shifted to risk-off sentiment. This was the 2nd biggest collapse of a bank in the US. Things are getting tougher for the US economy and Fed as the high levels of inflation is a matter of concern and a state of stagflation is also posing a major threat. Hence, the economy may take a blow from any further tightening in the interest rate policy. Analysts have predicted that the Fed is likely to pause the rate hikes after a brief rise of 0.25%.
On the price charts, we saw the GBP/USD pair hitting a multi-month high 1.2585 on Friday after which it dropped, moving beneath the key support level of 1.2545 which was also the highest price on 14th April. The pair moving above the key support level of 1.2448 along with the remaining above the 50-period Moving average can be taken as a bullish signal. The pair price will also get impacted from the upcoming UK house price index (HPI) data release for which the economists are anticipating a 3.6% drop in the house prices for the last month.