GBP/USD Trade to a Monthly High
There is a bank holiday in the US so there are not many activities. US traders are also not available to trade on Monday as markets closed.
However, the GBP/USD pair trading near a high point of one month it posted on Friday. The last high post in the vicinity of 1.2670 as there is an increased risk appetite. It became the market’s insignia as the week opened afresh for trading.
The pair is on the right path to get a rally in the area of 4.0% from a monthly low. The low appeared in the middle of the 1.2100 area. Analysts are putting as due to the US Dollar weakness, as it continued on Monday.
It could then translate to the pair being on its way to print a monthly profit of 0.6%. That will be the first monthly profit for 2022. Analysts are still careful over the possibility of a more relevant recovery for the pair.
It calls for caution due to the policy difference between the Fed and the BOE. The economic divergence between the UK and the US determines the pace of the recovery.
It, nevertheless, seems to be in the favor of the US Dollar, as analysts say. It looks like a move to the latest low is more feasible than a return above the 1.30 benchmarks.
Indeed, reports published by the US CFTC on Friday was quite revealing. It showed that investors keep adding to the Pound’s short positions. This is in spite of the recovery from the low of the middle of the month.
The indications of the above is one that points to appetites to sell the rallies.
The trading volumes of the GBP/USD pair are speculated to rise again on Tuesday. The US markets will be reopening, but the pair’s pace might drop again going into the weekend. The UK market will also be closing for a long public holiday.
That does not remove the possibility of volatilities in the market. Traders are getting ready for many US reports coming up this week.
The Consumer Confidence report is expected for Tuesday. The ISM and Manufacturing Purchasing Managers’ Index for May comes on Wednesday. April’s JOLTs Jobs report is also expected on Wednesday.
The ADP employment change report comes up on Thursday. The labor market data for May will be released on Friday. Bulls of the US Dollar might need an opportunity for a comeback on their old positions.