The Market’s Risk-On Rally: GBP/USD & EUR/USD Surge Ahead

GBP/USD: Perfect Timing at 1.30

On Thursday, I took a bold stance, going long on GBP/USD at 1.30. At the time, the pair was lingering at a crucial support level and the fundamentals backed the move. The Bank of England holding rates at 5% further solidified my view that GBP would benefit from any risk-on sentiment in the global markets. Sure enough, Friday saw a remarkable rally as market sentiment shifted and the pound gained momentum.

GBPUSD – 17 OCT – Analysis by Orgest on TradingView.com

With 5% interest rates, the pound has positioned itself as a high-yielding currency in a risk-on environment, where investors seek growth over safety. As the risk appetite expands, GBP remains one of the top candidates for future gains and my 1.30 buy looks even more solid now that the market has responded.

EUR/USD: Betting Big at 1.08

At the same time, I went long on EUR/USD at 1.08. The market was eyeing the European Central Bank’s upcoming interest rate adjustment, where the marginal lending facility is set to decrease on October 23rd. While this might have seemed like a negative for the euro, I saw an opportunity. The markets had already priced in the ECB’s dovish stance and Friday’s rally confirmed that the euro was ready to push higher.

The rally on EUR/USD saw it closing above 1.08, in line with my expectations. Despite the rate cuts, the euro is benefiting from improving global sentiment and it’s clear that the market is shaking off its earlier bearish bias. This risk-on continuation is giving life back to both the euro and the pound, confirming that these buys were well-timed.

EURUSD – 17 OCT 2024 – Analysis by Orgest on TradingView

Conclusion: A Winning Week for Both Pairs
Friday’s market action made one thing clear: risk is back on the table. Both GBP/USD and EUR/USD have rallied sharply, vindicating my long positions from Thursday’s calls. As we head into the next week, the market looks poised for more gains, with these pairs sitting comfortably above their respective support levels.

Check out my original posts from October 17th on TradingView for more details on why I made these moves—this is just the beginning of the broader trend we’ve been tracking.