Should investors be wary of further downside potential in GBP/USD, which has posted six consecutive days of negative closes?

Should investors be wary of further downside potential in GBP/USD, which has posted six consecutive days of negative closes?

28.09.2023

In yesterday’s U.S. currency trading, the U.S. dollar rose against major currencies after Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, stated that “if the domestic economy remains resilient, one more 25-basis-point rate hike will be necessary.” The USD/JPY pair rose by approximately 80 pips, from 148.854 to 149.706, following an upward trend along the +3σ line of the hourly Bollinger Bands.We must remain vigilant to see if today’s U.S. economic data releases will trigger further gains.

Among European currencies, the pound fell against the U.S. dollar for the sixth consecutive day ahead of key speeches scheduled for today.GBP/USD fell from 1.2163 to 1.2110. Technically, GBP/USD continues its downward trend along the 10-period moving average on the 4-hour chart, and on the daily chart, the RSI has fallen below the oversold level of 30 to 18.4. Therefore, we should watch for signs of a potential temporary rebound or a selling climax to gauge the market’s direction.

Today’s schedule includes: Turkey’s Economic Confidence Index at 4:00 PM, the ECB’s Monthly Report at 5:00 PM, Germany’s Consumer Price Index at 9:00 PM, U.S. Initial Jobless Claims, U.S. Q2 GDP, and the U.S. GDP Deflator at 9:30 PM, remarks by Charles Goolsbee, President of the Chicago Fed, at 10:00 PM,at 11:00 PM: U.S. Pending Home Sales, at 11:30 PM: U.S. Weekly Natural Gas Inventories, at 11:45 PM: Remarks by MPC Member Green (UK), at 12:00 AM: U.S. Kansas City Fed Manufacturing Activity Index, at 2:00 AM: U.S. 7-Year Treasury Auction, and at 5:00 AM: Remarks by Fed Chair Powell (U.S.).We will closely monitor the downside potential for GBP/USD, which has posted six consecutive bearish candles.