GBP/USD Price Forecast – British Pound Positive On Dollar’s Weakness
Following a week of mixed headlines and macro data outcome, GBPUSD closed last week on a dovish note, but a look at the daily chart shows that the pair closed on a positive note on Friday. While disappointing macro data outcome owing to worse than expected UK inflation data influenced by Brexit uncertainties and UK Prime Minister Theresa May losing vote in house of commons session last week kept fundamentals of GBP in dovish note, sharp drop in US Dollar owing to disappointing macro data and political proceedings in USA helped the pair gain positive price action and hold steady above 1.29 handle.
US President Trump’s Antics Puts USD on Bear’s Path
The pair carried forward with Friday’s positive price action and held steady above 1.2910 handle across Asian market hours. US President Donald Trump in an unexpected move declared a state of national emergency to circumvent Congress orders and divert funds towards his initiative to build border wall between U.S. & MEXICO. This has caused greenback to decline in the broad market. US market is closed for the day owing to the celebration of ex-President Washington’s birthday and this leaves price action in the mercy of Brexit headlines. As of writing this article, GBPUSD pair is trading at 1.2914 up by 0.19% on the day.
Given the clear lack of macro data updates from both sides of pair and broad-based US Greenback’s weakness, British Pound is likely to trade positive for rest of the day. The main focus now is on Employment and earning reports from the UK scheduled to release tomorrow during London market hours which is expected to provide directional cues. Ahead of said update, the pair is expected to move range bound with positive bias influenced by Brexit headlines. When looking from a technical perspective, the pair is likely to trade positive in the short term as the price is well above 20, 50 & 100 MA’s in the hourly intra-day chart and momentum indicators RSI & Stochastic are well near the overbought region in hourly and daily charts supporting bullish influence on pair’s price action.
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This article was originally posted on FX Empire
