GBP/USD eventually closed the week on lower ground after reaching new 2018 lows. No progress on Brexit and a small dovish turn in the BOE hurt the pound. The upcoming week features PMI data and a speech by Carney. Here are the key events and an updated technical analysis for GBP/USD.
Brexit was on the sidelines on the EU Summit and there is basically little progress. In addition, Haskel, a dove, is joining the BOE instead of McCafferty, a hawk. They both spoke at the same event and the stark contrast weighed on the pound. UK GDP for Q1 was upgraded to 0.2% q/q in the last read, giving some respite to the pound. In the US, fears of trade wars were slightly lower as Trump refrained from taking the toughest possible action against Chinese investment. US data was mixed.
GBP/USD daily graph with resistance and support lines on it. Click to enlarge:
* All times are GMT
GBP/USD Technical analysis
Pound/dollar dropped sharply, reaching the 1.30 handle and eventually closed just around 1.3205, mentioned last week.
Technical lines from top to bottom:
1.3615 capped the pair in late 2017. 1.3470 was a swing high in early June.
The round number of 1.34 could provide further support. Further down, 1.3315 was a swing high in late June.
1.3250 was a swing low in early June. Even lower, 1.3205 was the low point in late May. 1.3100 was a swing low in mid-June and 1.3050 is the latest 2018 low. The round number of 1.3000 awaits below
I remain bearish on GBP/USD
The small upgrade in UK GDP is unlikely to change the broader picture for the pound. And that picture is that Brexit Day is nearing without an agreement. In addition, the US Dollar enjoys the occasional risk-off sentiment related to trade.
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