GBP/USD Forecast

Coming Up Today (all times GMT) GBP MPC Minutes (8:30) USD Existing Homes Sales (14:00) CAD BoC Policy Report (14:30) CAD BoC Press Conference (15:15)   Forex pairs responded to the global rally in equities yesterday, as the dollar and yen sold off in favor of riskier currencies. Headlining the move was the AUDUSD which rose to a high of 1.0750, nearly 200 pips above its Monday lows. The question among Forex traders today is whether yesterday’s move has legs or was it the result of bargain hunting and short covering. As such, will be watching this morning’s lows; if they hold it could lead to another round of buying momentum today. EURUSD Taking advantage of the overall fall in the dollar yesterday, the EURUSD twice traded back above 1.4200 before settling around the 1.4150 level. Looking ahead, Forex traders will be watching the 1.4200 level closely. If the pair once again trades above 1.4200 and succumbs to selling, it will reveal that traders are selling into the...

Forex Technical Update Prev: GBP/USD in a Pullback after Bearish Breakout (7/18) GBP/USD Failed Bearish Breakout - The bearish breakout yesterday was followed by a pullback towards 1.6075. We reached across to find resistance at 1.6080, but the market stayed above the recent local pivot near 1.6058, and built strength instead. Bullish Breakout…more clues needed - Now there is an upside break. Note the RSI kissing 70 after just kissing 30, reflecting a ranging mode. The break to the upside is like the break to the downside so far -  no confirmation yet. - A throwback can help to confirm the bullish intent if it fails to break below 1.6080. That will confirm weak bears. To confirm strong bulls, we want to see the RSI break above 70 convincingly. - The RSI in the 4H chart should at least break back above 60 to start signaling the bullish attempt. We can also see that the recent high near 1.62 is indeed a cluster of resistance (up to...

  The USD/CHF saw a massive relief rally on Tuesday as traders suddenly felt that all was right in the world. Of course, this will more than likely change in a few hours, as the markets are very reckless at the moment. When that does – there should be a continuation of the overall trend, which of course has been down for years. We like selling rallies, and we like the 0.83 level as a place in which to sell.

  The GBP/USD pair rose on Tuesday, but looked oddly weak in the later part of the session. In fact, at the time of this writing, it appears that the pair is only going to be slightly changed at the end of the day – quite a statement after rising so quickly earlier. Because of this, we are still bearish of this pair, but need to see a close below the 1.59 level on the daily chart to sell.

On Tuesday, the pound showed advance against the dollar as hopes that EU leaders will be able to put a plan to avoid Greek default boosted demand on higher-yielding currencies. The British economy lacked fundamentals therefore the pair followed the general sentiment in the market as the dollar showed decline against a basket of major currencies despite the rise in U.S. housing starts to 629,000 in June from 549,000 in May, according to data released on Tuesday. On Wednesday, at 08:30 GMT, attention will be toward BoE minutes release which is expected to show another split among policy makers which is expected to be the same as the previous months.  The minutes for June's rate decision pushed the sterling to the downside as it showed more consensus among BoE policy makers regard keeping lose monetary policy. In July, the same voting is expected to take place with 7-2 for interest rate and 8-1 for APF.   In the US, eyes will be on MBA...

Forex Technical Update Prev: GBP/USD Completes a ABC Correction; Bullish Momentum is Tested (7/15) GBP/USD - The sterling failed to make a meaningful bullish attempt from the 1.6075 level after an ABC correction last Friday. - Instead of making new highs, the market hammered at the support until breaking it today, and falling to the 200SMA in the 1H chart. - Note the RSI reading finally broke below 40 to kill the bullish momentum, and even shows some short-term bearish momentum as the reading kissed 30. - At the second half of today’s US session, we are seeing some pullback after the strong bearish candle from a little earlier. - If the market fails to break above 1.6075 in the Asian session, and can avoid breaking back above the 1.6110 level in the upcoming European session (in about 12hours), then the bearish outlook is still valid, at least in the very short-term towards 1.5930-1.5940 area. - The bearish outlook can extend lower towards 1.5780-1.58 area. - However, an...

  The USD/CHF pair rose on Monday, after gapping lower at the open. The pair is most decidedly bearish, but this move may lead the way to a bounce of sorts in the market. Any serious trader knows that these bounces are to be sold as the market is so weak. The 0.83 area above would be a perfect spot to see bearish price action from which to sell.

  The GBP/USD pair fell on Monday as traders shed risk and rushed for safe haven assets like the USD. The pair bounced off of the 1.60 level, but appears that it will attempt to finish near it – hardly a sign of confidence in the Pound. The pair needs to close below 1.59 in order for us to sell for the long-term.

The GBP/USD moved south on Monday with sterling still weak and extending the losses to a stronger dollar amid risk aversion and bleak outlook for both nations which still kept the dollar on stronger grounds. Investors are worried over the deepening debt crisis in Europe and the debt problems in the United States with the Congressional leaders unable to reach an agreement on raising the debt ceiling, and the weak sentiment surely powered risk aversion and keep the dollar favored over sterling. The weak global environment is a constant reminder of the fragile conditions in the United Kingdom and Ernst & Young UTEM Club on Monday revised again their growth estimates for UK to the downside to 1.4% this year from 1.8% which was further downside pressure on sterling. On Tuesday, the focus will remain on the fragile sentiment in the market amid high doubt that the EU leaders will find a suitable and sustainable solution for the worsening debt crisis and stem...

The pound couldn't ignore the raging debt crisis and tested lower ground. The upcoming week consists of the MPC meeting minutes that will show the direction of rates, as well as key consumer information. Here is an outlook for the British events, and an updated technical analysis for GBP/USD. British inflation is easing once again. It surprisingly dropped to 4.2%, lifting some pressures for a rate hike. And there's no need for intense pressure when the economy sees another rise in jobless claims. GBP/USD chart with support and resistance lines on it. Click to enlarge: Nationwide Consumer Confidence: Publication time unknown at the moment; delayed from last week. This survey of around 1000 consumers is good gauge of the mood in the UK. It provided a nice surprise last month by leaping to 55 points, much better than expected. A small drop is expected now.   Rightmove HPI: Sunday, 23:00. This isn't the most accurate house price report available, but it is the earliest and...