GBP USD Forecast | Daily Technical Analysis for February 1, 2017
GBP USD Technical Forecast Overview
Yesterday Closed 1.2582
Today Open 1.2582
Day’s Range 1.2544 – 1.2592
52 wk Range 1.1450 – 1.5020
1-Year Return – 12.82%
GBP USD Technical Support and Resistance
Possible trading range for today 1.2544 – 1.2592
Support 1: 1.2457
Support 2: 1.2413
Support 3: 1.2341
Resistance 1: 1.2601
Resistance 2: 1.2645
Resistance 3: 1.2717
GBP USD Fundamental Analysis
GBP USD continued to consolidate and range but it was helped to stay afloat to an extent, by the weakness in the dollar. We had been mentioning that despite the bounces that we have been seeing in the pair over the last few weeks, the underlying fundamentals still point to a lower pound over the short and medium term and hence any bounce in this pair should be used as an opportunity to go short. But picking the right spots to go short is the key to the trade as the dollar is under a period of sustained weakness due to Trump and his antics.
During the early part of the day, we had a bout of dollar strength and this, along with some month end flows helped to push down the GBPUSD pair towards its lows near 1.2400. But from there, we saw a strong rebound in the pair as Trump and his team of advisors made statements accusing countries like Germany, Japan and China of currency devaluation to make themselves competitive. This set off a bout of fear in the market that the US would also launch a race to the bottom for the dollar and this would also spell the beginning of a trade and currency war between the major economies of the world. This weakened the dollar and the month end fixing also passed off and this saw the pound rebound towards 1.26 and it trades just below that, as of this writing and it is likely to remain volatile in the coming days as we have a slew of data coming up, to begin the new month.
We have the manufacturing PMI data from both the UK and the US and we also have the FOMC rate and statement later on in the day. The FOMC is expected to keep the rates on hold and provide some guidance on future rate hikes but all these are likely to be pushed to the background if Trump and his team continues to involve themselves in making hate statements triggering equally bad responses from his counterparts around the world.