Market Overview

GBP/USD Forecast: Positioned For Additional Downslide, UK GDP In Focus

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On Tuesday, the GBP/USD pair once again met with some fresh supply around the 1.3225-30 region and tumbled to an intraday low level of 1.3113. Persistent US Dollar buying interest, supported by surging US Treasury bond yields amid speculations that the next Fed Chair could be more hawkish, triggered the initial leg of the downslide. The selling pressure aggravated after the BoE Deputy Governor Jon Cunliffe raised doubts over a possible BoE rate hike next week. In an interview published by a Welsh newspaper, Cunliffe warned that the economy has clearly slowed this year and described the exact timing of BoE rate hike as a more open question. 

The selling pressure, however, seems to have abated for the time being as focus shifts to the UK Q3 GDP data, which is expected to show a growth of 0.3 percent in the three months to September. A better-than-expected reading could provide a temporary boost to the British Pound but the broader trend would remain dependent on the incoming Brexit headlines. 

Later during the North American session, the US durable goods orders data should influence sentiment around the greenback and also be looked upon for some short-term momentum play ahead of the advance US Q3 GDP numbers on Friday. 

Technically, the pair remains poised to extend its downward trajectory even below the 1.3100 handle toward testing the 100-day SMA support, near the 1.3055 region. Some follow-through selling pressure has the potential to continue dragging the pair toward the key 1.30 psychological mark en-route to the mid-1.2900s, marking the 61.8 percent Fibonacci expansion level of the 1.3657-1.3027 downslide and subsequent retracement.

On the upside, the 1.3160-70 area now seems to act as an immediate hurdle, which if cleared could lift the pair back above the 1.3200 handle toward retesting 1.3225-30 supply zone. A convincing break through the mentioned barrier might negate near-term bearish bias and assist the pair to make a fresh attempt toward reclaiming the 1.3300 handle.

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The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: FXStreetEurozone Forex Markets

 

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