GBP USD Forecast for the Week of February 13, 2017
The GBP USD managed to hold its own over the last week but the return of the dollar strength and the fact that the pair has not been able to make a breakout on the upside over the past couple of weeks should begin to worry the bulls. For long, the pound has been one of the very few currencies that has been able to hold its own against the dollar even when the dollar was having its bouts of strength. But we have been repeatedly mentioning in our forecasts that any bounce in the pair is likely to be short lived and that we should be seeing the GBPUSD pair move down if and when the dollar strength returns.
This is what we saw last week as Trump made it clear that he would be handing out some great tax cuts within the next few weeks for the corporates and also the general public and this move was a relief for the dollar which had been at the receiving end due to the major policy changes and rhetoric from Trump and his team over the last few weeks. As the dollar strength returns, we found the pair struggle to stay above 1.2500 for long and it spent most of the last week below that figure. Article 50 has not been initiated as yet and though the underlying UK economy continues to show strength, the Brexit process continues to hang above its head and this is likely to keep the pair under pressure and we are likely to see 1.24 and 1.23 pretty soon.
Looking ahead to the coming week, we have the CPI data, retail sales and claimant count change data from the UK and we have the PPI data and retail sales from the US. All of these data are very important parameters for the strength of an economy and this will be especially important for the dollar as this data would give a hint on when the next hike would be. We expect the dollar to continue to strengthen in the coming week putting the GBPUSD pair under severe pressure.
GBP USD Technical Forecast Overview
Previous week close: 1.2490
Current Week Open: 1.2475
Today’s Market Range: 1.2475 – 1.2495
52 wk Range: 1.1450 – 1.5020
1-Year Return – 13.92%
GBP USD Support and Resistance Forecast
S 1: 1.2381
S 2: 1.2324
S 3: 1.2232
R 1: 1.2565
R 2: 1.2622
R 3: 1.2714