GBP/USD Forecast: Inching Back Closer To Yearly Tops, Key Brexit Speech Eyed

The post-FOMC US Dollar up-move lost steam on Thursday, with market participants largely ignoring better-than-expected US economic data: weekly jobless claims and Philly Fed manufacturing index. The GBP/USD pair rebounded from an intraday low level of 1.3470 and jumped back closer to yearly tops. 

The pair oscillated in a narrow trading band through the Asian session on Friday as market participants looked ahead to a key Brexit speech from the UK Prime Minister Theresa May. Meanwhile, an alarming report that North Korea could consider a hydrogen bomb test on the Pacific Ocean of an unprecedented scale held the greenback on the back-foot but did little to provide any fresh bullish impetus to the major pair.

There isn't much in terms of any major market-moving economic releases on Friday. Hence, May’s remarks might now turn out be a key catalyst influencing the sentiment surrounding the British Pound and could trigger some volatility across the GBP crosses. 

Technically, the pair has managed to rebound from a short-term ascending trend-channel resistance break-point, now turned support, and remains poised to extend its strong up-move. The bullish expectations would be further reinforced once the pair decisively breaks through the 1.3600 handle. 

On a convincing break-through the mentioned hurdle, the pair is likely to surpass 1.3660 level (yearly tops) and head towards reclaiming the 1.3700 round figure mark. The bullish momentum could further get extended towards the 1.3800 handle ahead of its next major hurdle near mid-1.3800s.

Conversely, any corrective slide below the key 1.3500 psychological mark might continue to find fresh buying interest near the 1.3470-50 region, which if broken decisively could lead to an additional near-term corrective slide. Below mid-1.3400s, the pair seems more likely to break below the 1.3400 handle and head towards to a test of the 1.3330 intermediate support, en route to the 1.33 handle and the 1.3280 horizontal support.

Posted In: ForexMarketsFXStreet
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