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GBP/USD Daily Price Forecast – GBP/USD Stable Above 1.31 Handle on Weak US Greenback in Broad Market

Colin First

The GBP/USD enjoyed optimism on Brexit and also US Dollar weakness following the weak US inflation report. The pair is now looking to break the bullish consolidative mode to the upside and reach fresh six-week highs beyond the 1.31 handle, as the focus now shifts towards the BOE Governor Carney’s speech due later in the European session. As of writing this article, the GBPUSD pair is trading near flat at 1.3110 up 0.02% on the day. The spot caught fresh bids in late Asian market hours and refreshed multi-week tops at 1.3122 levels, as the US dollar remains on the back foot across its main peers on the back of downbeat US CPI data and easing US-China trade worries.

Brexit Optimism Keeps The Pair Supported on Upside Move

Amid broad-based US dollar softness, Cable was left unaffected by the BOE’s status-quo and cautious stance, in the wake of looming Brexit uncertainty. The major was also buoyed by the renewed optimism around the Brexit deal, especially after the UK’s Brexit Secretary Raab noted that he is confident that the UK will get a good Brexit deal. Meanwhile, the recent Bloomberg report that cited the EU would start redrafting the Irish Brexit protocol to appease the UK, also helped trigger the rally in the pound. Looking ahead, the pair will continue to track the broader market sentiment and USD dynamics ahead of Carney’s speech and key US economic releases, including the retail sales and prelim UOM consumer sentiment.

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The pair is biased higher according to intraday technical readings, as in the 4 hours chart, an intraday retracement resulted in a sharp recovery once the price tested a bullish 20 SMA, currently at 1.3030. Technical indicators maintain their strong upward slopes well above their mid lines, with the RSI nearing overbought readings. For GBP/USD, the path of least resistance is on the higher side, the higher highs and higher lows, when looking at 50-hour, 100-hour and 200-hour Ma’s. Expected support and resistance levels for the pair are at 1.3085, 1.3050, 1.3010 and 1.3125, 1.3170, 1.3215 respectively.

This article was originally posted on FX Empire

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