Market Overview

GBP/USD Forecast: A Brief Pause Within A Well-established Bullish Trend

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The GBP/USD pair had a rather volatile session on Monday, initially opened with a bearish gap on US tax reform optimism but then managed to rebound around 120-pips from session lows and jumped back above the key 1.35 psychological mark on hopes of some positive news coming out the UK PM Theresa May and the EU President Jean-Claude Juncker's meeting.

The UK and EU, however, failed to reach a Brexit deal and triggered a brief sell0ff in the British Pound, dragging the pair back to the 1.3400 neighborhood. Meanwhile, the pair had a rather muted reaction to yesterday's upbeat UK construction PMI print for November, with Brexit headlines turning out to be an exclusive driver of the pair's movement at the start of a new trading week. 

The pair now seems to have stabilized and was seen oscillating in a narrow trading range above mid-1.3400s as investors now look forward to the UK services PMI report and the US ISM non-manufacturing PMI prints for some fresh impetus. 

From a technical perspective, the pair once again met with some fresh supply near mid-1.3500s, but the subsequent price action now seems to suggest that the bullish momentum might still be far from over. Hence, bulls would now be looking for a follow-through buying interest beyond the mentioned hurdle, above which the pair seems all set to accelerate the up-move toward 1.3580 horizontal resistance en-route the 1.3600 handle and recent swing highs barrier near the 1.3655-60 region. 

On the flip side, any corrective slide might continue to find immediate support near the 1.3400 handle, below which the corrective slide could get extended toward mid-1.3300s. Any follow-through weakness might now be limited and is likely to find strong buying interest near the 1.3300-1.3290 region. Only a decisive break below the 1.3300 handle would negate the bullish bias and turn the pair vulnerable to slide further in the near-term.

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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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