GBP/USD Forecast | Daily Technical Analysis for January 31, 2017
GBP/USD Technical Forecast Overview
Yesterday Closed 1.2486
Today Open 1.2486
Day’s Range 1.2483 – 1.2519
52 wk Range 1.1450 – 1.5020
1-Year Return – 12.22%
GBP/USD Technical Support and Resistance
Possible trading range for today 1.2483 – 1.2519
Support 1: 1.2463
Support 2: 1.2429
Support 3: 1.2375
Resistance 1: 1.2571
Resistance 2: 1.2605
Resistance 3: 1.2659
GBP/USD Fundamental Analysis
GBP/USD has been looking very weak over the last 24 hours and the fact that we are near the end of the month could be one of the reasons for it. During the end of the month, the UK has to pay the membership fees to the Eurozone and this is generally in excess of 1 billion euros. Due to this month end flows, there is generally a lot of volatility in the pound. Sometimes the pair goes up and sometimes it goes down. The banks and others which process these monthly flows try and mask these flows as much as possible so that it does not affect the overall market situation but in general, it shows through and this is probably one of the reasons why the pound has been weak.
On the other hand, we had been mentioning that the Brexit process is likely to dominate the moves of the pound and continue to keep pressure on GBP/USD over the short and medium term. Though we have been seeing some clarity over the last few weeks, confusion and risks will continue to reign in the pound till the entire process is completed. That is the reason why we had mentioned that though the pound reached highs close to 1.27, it was only a matter of time before it corrected back and now we expect this correction to continue further at least till 1.2300 in the short term. Pound will continue to be the weak currency and though there may be small bounces due to the weakness in the dollar, these will not last long.
we do not have any major news from the UK but we have the consumer confidence data from the US. Do note that this is the last day of the month and so expect some more month end flows as well and do the needful to protect yourself against the subsequent volatility.