GBP/USD Forecast: Daily Technical Forecast – April 07, 2017
GBPUSD continues to trade between 1.24 and 1.25 and this is what we have been mentioning in our last few forecasts as well. With the doubts and uncertainties around the Brexit process continuing to abound, we do not expect either the bulls or the bears to have enough ammunition to push the pair in either direction without some fundamental event asking them to move in either direction. That fundamental push has to come either from the dollar or the pound.
With the dollar expected to hold steady in the coming days, as Trump and his team sort out the policy paralysis that they seem to be in now, we should expect the pound to begin to make a move within the next few days as negotiations between the UK and the Euro leaders begin and it becomes more and more clear on what will be given and what will be taken from each side. The recent data from the UK has also been quite mixed making it difficult to form an opinion about the impact of the Brexit process on the UK economy and so it is wise to wait and watch how the events turn out.
Today morning, the markets woke up to the news that the US had launched missiles against a Syrian airbase and this has increased the risk around the world and has raised fears of a large scale conflict in the region. This has led to a risk off mode and a general strengthening of the dollar but so far, it has not had much effect on the GBPUSD pair. The full impact of this event will be known when the European markets open but even then, we expect the lows of the range at 1.24 to hold comfortably.
Looking ahead to the rest of the day, we have the Manufacturing Production data from the UK and also a speech from Carney where he is expected to paint a strong picture of the economy. But the biggie is obviously going to be the NFP report from the US which the markets expect to be strong, based on the ADP employment report. If the report does come out strong, we could see the lows of the range at around the 1.24 region being seriously tested post the news.