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24 September 2024,02:10

Trade Of The Day

Pound Sterling Gains As Dollar Remains Weak On Post Fed

24 September 2024, 02:10

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Fundamental Analysis

* Post Fed Pop: The pound sterling continues to gain strength against the dollar, as the greenback remains fragile following the Federal Reserve’s recent shift toward a rate-cutting cycle. Last week, the Fed’s unexpected decision to implement a double rate cut has weakened USD flows, pushing GBP to the upper range. In terms of economic data, September’s S&P U.S. Manufacturing PMI dropped to 47.0 MoM, its lowest level since July 2023, reflecting a bleak outlook for the U.S. manufacturing sector. Chicago Fed President Austan Goolsbee further impacted markets with cautious remarks on Monday, suggesting that more rate adjustments could be needed as he emphasized that the Fed might have to lower rates significantly to maintain sufficient liquidity in business lending, especially as the tight U.S. labor market begins to ease.

Technical Analysis

* Technical Breakout: GBPUSD was traded higher while currently testing near the resistance level 1.33850. MACD which illustrate ongoing bullish momentum signal suggest the pair to likely further extend its gains after it breaks above the resistance level.

*Resistance and Support: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 1.35100 after it breach above the level 1.33850. Conversely, a potential reversal is also to be expected and the price could head back towards 1.32500.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Looking ahead, investors will turn their attention to upcoming U.S. data, including CB Consumer Confidence, Durable Goods Orders, GDP, and the PCE Price Index, for additional insights into market trends.

Know how to manage trading risks with risk management strategies.

Monitoring

Stay updated on US and UK data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.

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