GBP/USD Forecast: Move Beyond 1.3280 To Negate Any Near-term Bearish Bias

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The GBP/USD pair built on overnight gains, triggered by UK retail sales data, which bettered expectations by growing 0.3% in October versus the forecast of 0.1% and clocked 2-week highs on Friday. A fresh wave of US Dollar selling bias, amid renewed US political jitters over Russia's interference in the 2016 Presidential election, remained supportive of the pair's bid tone for the fourth consecutive session. Meanwhile, the House of Representative in the US passed the tax reform bill but failed to provide any fresh bullish impetus to the greenback. Attention now turning towards a Senate approval of the long-awaited US tax legislation.

In absence of any major market moving economic releases from the UK, traders would take cues from the US housing market data - housing starts and building permits, later during the North American session. In the meantime, the pair remains at the mercy of broader market sentiment surrounding the buck and any fresh Brexit news.

The technical setup points to an extension of the ongoing momentum towards the 1.3280-85 horizontal resistance en-route to the 1.3300 handle. Some follow-through buying interest would negate any near-term bearish bias and lift the pair back towards the 1.3375-80 supply zone, with some intermediate resistance near the 1.3335-40 region.

On the flip side, the 1.3200 handle now becomes an immediate support to defend, below which the pair could drift back to the 1.3160 strong horizontal support. Failure to defend these immediate support levels would turn the pair vulnerable to head back towards testing the 1.3100 round figure mark before eventually dropping to the post-BoE lows support near the 1.3070-60 region.

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Posted In: ForexMarketsfxstreet. fxstreet.com
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