It was an odd day in North American trade that saw a variety of trading instruments perform daring feats of acrobatics as they jumped, fell, and sometimes did both before the day was through. US equity markets were some of the most egregious offenders as the Dow was down over 200 points in late trade only to rally back up to finish down only 195, or around 1%. The S&P 500 didn’t fare much better by falling 1% as well, however, the typically correlated USD/JPY didn’t fall at all; it rose up close to 150 pips and challenged the psychologically daunting 120 level before retreating late. Other than the USD/JPY, the dollar didn’t fare too well and got kicked around by the other major currencies including the EUR, CHF, and CAD.
One currency that has had a lot of success against the USD lately is the GBP. While that wasn’t really the case today as the two currencies battled it out on both sides, it’d be surprising to see much more GBP strength from here. The nearly 950 pip rally that this pair has witnessed since the 12th of April has been surprising to say the least, particularly if you consider the uncertain nature of the UK elections coming up next week. Uncertainty tends to drive investors away, and the GBP/USD may be ripe for deliverance even though the USD hasn’t been getting many pats on the back lately.
Along with the near millennial rally for the GBP/USD, it has been following a pretty strong and resourceful uptrend. If this pair was to break through this trend line, it may signal the end of it and a strong retracement may be in order. If this were to retrace along Fibonacci lines, the 50% retracement near 0.5030 or the 61.8% retracement near 1.4920 look intriguing as they also line up with previous support/resistance points. Beware though that political uncertainty could move this pair even more than usual and has the potential to erase all of the gains this pair has enjoyed over the past three weeks.
Figure 1:
Source: www.forex.com
Recommended Content
Editors’ Picks
Gold gives away some gains, slips back to $2,980
Gold retraced from its earlier all-time highs above the key $3,000 mark on Friday, finding a footing around $2,980 per troy ounce. Profit-taking, rising US yields, and a shift to a risk-on environment seem to be putting the brakes on further gains for the metal.
EUR/USD remains firm and near the 1.0900 barrier
EUR/USD is finding its footing and trading comfortably in positive territory as the week wraps up, shaking off two consecutive daily pullbacks and setting its sights back on the pivotal 1.0900 mark—and beyond.
GBP/USD remains depressed, treads water in the low-1.2900s
GBP/USD is holding steady in consolidation territory after Friday’s opening bell on Wall Street, hovering in the low-1.2900 range. This resilience comes despite disappointing UK data and persistent selling pressure on the USD.
Crypto Today: BNB, OKB, BGB tokens rally as BTC, Shiba Inu and Chainlink lead market rebound
Cryptocurrencies sector rose by 0.13% in early European trading on Friday, adding $352 million in aggregate valuation. With BNB, OKB and BGB attracting demand amid intense market volatility, the exchange-based native tokens sector added $1.9 billion.
Week ahead – Central banks in focus amid trade war turmoil
Fed decides on policy amid recession fears. Yen traders lock gaze on BoJ for hike signals. SNB seen cutting interest rates by another 25bps. BoE to stand pat after February’s dovish cut.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.