GBP/USD had a great week rising to the highest levels since January as the mood in markets improved. A very busy week awaits the pound: inflation, employment, and retail sales stand out. Here are the key events and an updated technical analysis for GBP/USD.
China and the US traded pleasantries about trade relations, Trump mused about returning to the TPP, and also hope for Brexit talks on trade which begin now all pushed the pair higher. Worries about Syria were ignored. Over the weekend, the US, the UK, and France launched airstrikes against the Assad regime’s chemical weapons but the wider effects may be limited. In the US, the Fed expressed confidence about the economy and inflation reaching its targets while inflation indeed increased to 2.1% on the core. What’s next?
GBP/USD daily graph with resistance and support lines on it. Click to enlarge:
GBP/USD Technical Analysis
Pound/dollar initially batteld with the 1.4150 level (discussed last week) before moving higher and nearing 1.43.
Technical lines from top to bottom:
1.4345 is the January 2018 swing high that is worth watching. 1.4300 capped the pair in mid-April. .
1/4260 was the high point in March and provides another line of defense. 1.4150 capped the pair in mid-February.
1.41 capped the pair in early April and also in mid-March. It is followed by the round level of 1.40, which is eyed by many.
1.3890 served as support in mid-March and maintains its role. 1.3790 was a swing low in mid-March.
I am neutral on GBP/USD
While Brexit negotiations may get stuck at some point, the current optimism will probably be good enough to counter the US Dollar. The greenback does not price in the rise in US inflation.
Our latest podcast is titled Volatility venting and Brexit can-kicking
Follow us on Sticher or iTunes
- EUR/USD forecast – for everything related to the euro.
- USD/JPY forecast – projections for dollar/yen
- AUD/USD forecast – predictions for the Aussie dollar.
- USD/CAD forecast – Canadian dollar analysis
- Forex weekly forecast – Outlook for the major events of the week.