British Pound Forecast: Bullish
The British pound continues to trade higher on Monday after some gains since early March. This morning saw another bullish breakout above the vaulted 1.4000 psychological level amid an agreement on the Brexit Transition plan, and with two very big drivers on the horizon for this week with tomorrow’s CPI and Thursday’s BoE rate decision, the potential remains for high levels of volatility across GBP-pairs.
Inflation has very much been a push-point in the year-long bullish trend in GBP/USD, and with the UK having seen five consecutive months of inflation at 3% or more, the Bank of England appears to have their work cut out for them.
Like what I said yesterday that if the market has an universal expectation for another interest rate hike from the US Federal Reserve without more hawkish accompanying comment, there could be some downside for the U.S. dollar.
Technically, the pair keeps moving up through a uptrend channel started from mid-December after finding supports on Fibo 61.8% retracelemt (1.37380). For the long term period, it is likely to maintain its upward momentum, but for the near term however, it is facing two resistances ahead at 1.41445 and upper channel line. If you are an investor focused on short-term investment, there is still some room to buy right below the 1st resistance.
Chart 1: GBPUSD Daily
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