Market Overview

GBP/USD Forecast: Upside Seems Limited, Bearish Below 1.3150

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The GBP/USD pair built on Friday's sharp rebound from 2-week lows, with bulls now looking to extend the up-move further beyond the 1.3200 handle. The British Pound was being supported by the UK PM Theresa May and the EU Commission's agreement to speed up Brexit negotiations.

However, persistent US Dollar buying interest after the US Senate approved a budget measure late Thursday that will allow Republicans to pursue tax cuts might keep a lid on any strong follow-through up-move for the major pair.

On the economic data front, this week's key focus willd be on Q3 GDP figures, both from the UK and the US, due on Wednesday and Friday respectively. In the meantime, speculations over the next Fed Chair candidate should influence the USD price-dynamics and drive the pair ahead of this week's important event risk.

Technically, the pair last week did confirm a bearish break down and with short-term indicators gradually drifting into bearish territory, the up-move runs the risk of fizzling out near the 1.3225 horizontal resistance. Momentum beyond the mentioned resistance might trigger a short-covering bounce and lift the pair towards 1.3265-70 intermediate hurdle ahead of the 1.3300 handle.

On the flip side, mid-1.3100s now seems to protect immediate downside, which if broken would reaffirm near-term bearish bias and accelerate the fall towards monthly lows support near the 1.3030-25 region. A follow-through selling pressure has the potential to drag the pair even below the key 1.30 psychological mark towards its next support near 1.2950 level, representing the 61.8% Fibonacci expansion level of the 1.3657-1.3027 downslide and its subsequent rebound.

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: Forex FXStreet FXstreet.comForex Markets

 

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