GBPUSD | 1.2626 will be the new high before the crash!

The GBP/USD, after a significant descent, has finally reached the demand zone at the level of 1.2535. In this area, I anticipate a possible upward structural change on M15 during tomorrow's London session. Subsequently, I could consider entering the market with the goal of reaching the level of 1.2626, where a significant liquidity volume is present.

Regarding the fundamental analysis, the GBP/USD has again been subject to bearish pressures, touching the lowest point since mid-December below 1.2550 on Monday. The widespread strength of the US dollar, fueled by impressive labor market data and the recent optimistic PMI report, continues to influence the pair. During the North American trading session, the GBP/USD recorded losses of 0.74%, trading at 1.2535. Factors such as last Friday's US economic data and comments from Federal Reserve Chair Jerome Powell over the weekend keep the US dollar higher in a risk-off context.

Jerome Powell stated in an interview that it is premature to consider rate cuts, emphasizing that the goal of pushing inflation towards its 2% target has not been fully achieved. In last week's January Nonfarm Payrolls report, 353,000 Americans were added to the workforce, while the unemployment rate remained stable at 3.7%.

US Treasury yields remain high throughout the day, supporting the greenback as investors recalibrate their bets on Fed rate cuts. Last week, they estimated the Federal Funds rate (FFR) to reach 3.96%, but following Powell's weekend comments, they expect it to reach 4.26%. Consequently, the US Dollar Index (DXY) rises by 0.44%, reaching 104.42.

Comment:

Good reaction of the price, but the next H4 candle will be fundamental to see a new swing high at the level 1.2566 that could limit the bullish bounce.

Comment:

Market grabbed the liquidity zone and formed a new demand zone where I will wait for a retest e for evaluating a long entry