GBP/USD Forecast

  USD/CHF had down day on Friday, after rallying earlier in the day. The end result was a shooting star-shaped candle for the second day in a row. This pair is a classic “sell the rallies” pair at this point, and anytime it pops up in value – it should be sold. We won’t buy, no matter the set up.

  GBP/USD had down day on Friday, but formed a hammer as traders came in and bought the Pound later in the day. The question then becomes whether or not this is a real move. We believe it is, but the overall bearishness of the pair can’t be ignored either. Any longs should move to break even fairly quickly as headline risks abound, and this pair follows equity markets.

  USD/CHF had a down week, breaking through the support area at 0.83. The pair looks like it wants to continue its bearish run, and we look to sell only – buying this pair is taking far too many chances. The rallies are to be sold, and so are the new lows.

  GBP/USD has broken down through the 1.59 level during the week, showing extreme weakness, but then bounced back above the 1.60 level – showing massive support after the fact. Because of this, although we are bearish of this pair, we have to admit it looks like a bounce is coming. Even with this, we believe that there will be a place that we will be getting short – it just isn’t here yet.

Both economies lack economic fundamentals which propose that there would be calm trading on the pair which is predicted to follow the general trend in market as it will not able to get direction from data. The dollar's weakness pushed the pair to the upside in the week ending July 15 as the dovish announcements by Standard and Poor's that the US economy may be prone to a downgrade within the coming three months made the outlook for the US economy bleak, amid the slowdown signaled in the second quarter as depicted by recent data.  Yet, the with the likelihood that there will be no extension to QE2 after its end in June, the dollar may advance against the pound, especially as the latest announcements by BoE policy makers show that there will be no soon tightening in monetary policy. In addition, the ease in inflation to 4.2% in June from 4.5% may encourage the BoE to keep lose monetary policy to...

The GBP/USD showed an incline in the week ended July 15 as the dollar was pushed down by threats from Standard and Poor's that the world's largest economy may be prone to a downgrade within the coming 90 days on possible default. Also, the dollar declined on speculations there may be a third-round stimulus by the Federal Reserve to boost the weakling recovery. However, by the end of last week, the dollar gained some ground after Bernanke revealed that launching QE3 is not possible unless the economy is in a strong need for it. The announcement is expected to give the dollar some strength as the supply will be reduced after the end of the 600-bond-purchase program in June. On the other hand, the pound was not much affected by the rise in jobless claims for the month of June and deceleration in inflation to 4.2% in the year ending June from the prior 4.5%. This week, the main focus will be on...

  The USD/CHF pair rose slightly on Wednesday, but the move was much smaller than the fall on Wednesday. The pair is most certainly in a downtrend for ages, and there is no reason to think it will change anytime soon. We like selling rallies in the USD/CHF pair.

  The GBP/USD fell on Thursday, but just barely. We still think this pair is bearish, and like the idea of selling rallies. However – we have no bearish candles to work with at the moment, so we will sit still. Look for weakness at higher levels before selling.

The lack of fundamentals from the United Kingdom left the pair subject to the sentiment and the dollar which accordingly biased the GBP/USD mainly to the upside. The dollar was generally the talk of the town on Thursday after Bernanke triggered the strong weakness with hints for the possibility to expand the stimulus to support the economy shall the weakness continue to broaden. More downside pressure on the dollar was from Moody’s downgrade warning to the United States shall they fail to reach the decision to raise the debt ceiling in time which will subject the nation to lose its top rating. Volatility remains evident and on Friday we expect the jitters to dominate the scene especially as the European continent focus on the release of the stress test results after the stock markets closing, and the lack of major data from Europe will intensify the fluctuations. From the United States, the economy will also end the week on a high note with heavy...

  The USD/CHF finally broke below the 0.83 area as traders sold off the USD against most currency pairs. The CHF is presently enjoying a general consensus that the world loves the Franc. The pair continues its bearish stance, and the next move is certainly down, just as it has been for years.