Market Overview

GBP/USD Forecast: 1.39 Handle Likely To Cap Any Further Up-move

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The GBP/USD pair managed to edge up for the third consecutive session on Monday and was supported by stronger than expected UK services PMI print for the month of February. The British Pound got an additional boost after the UK PM Theresa May said that they are close to a Brexit-transition deal with the European Union. The pair jumped to a three-day high level of 1.3878 but struggled to build on the momentum and now seems to have entered a consolidation phase, around 50-day SMA near mid-1.3800s.

With investors looking past May's optimistic comments, focus shifts to the New York Fed President William Dudley and the Bank of England (BOE) Chief Economist Andy Haldane's scheduled speeches. In absence of any important market-moving economic releases, their comments would be influence investors expectations about the central banks' monetary policy outlook and eventually provide some fresh impetus. 

Technically, the pair already seems to have reached an intermediate barrier and might continue to confront some fresh supply near the 1.3900 handle. Any subsequent up-move could get extended but is likely to be capped at a short-term descending trend-line resistance, currently near the 1.3985-90 region. The mentioned trend-line forms a part of a short-term descending triangle and hence, is likely to act as an important hurdle. 

On the flip side, the 1.3800 handle now seems to have emerged as an immediate support, which if broken could accelerate the fall toward an important horizontal support near the 1.3765 region, also forming a part of the descending triangular formation. A decisive break below the mentioned support would confirm a fresh bearish break and pave the way for an extension of the pair's near-term downward trajectory.

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Posted-In: FXStreetNews Eurozone Forex Markets

 

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