GBPUSD news - page 109
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The Pound To Dollar Forecast: How Much Higher Before GBP / USD Downtrend Resumes?
Donald Trump’s victory has had a surprising impact on exchange rates, with the GBP to USD exchange rate gaining.
The Pound to US Dollar exchange rate’s bullishness faded towards the end of Friday’s European session, but looked on track to end the week over half a cent higher despite the US Dollar’s own strength.
During next week’s session, traders may be especially prone to any indication from President-elect Donald Trump about whether or not he will maintain his protectionist stance on globalisation and trade.
But is the Pound (GBP) forecast to continue advancing on the US Dollar (USD) as investors digest the surprising election result?
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GBP/USD forecast for the week of November 14, 2016
The GBP/USD pair fell initially during the past week, but then turned around to form a hammer that sits upon the 1.25 level. This area was previously resistive, and it should now be supportive. A break above the top of candles should send this market looking for the 1.2850 level above which previously has been supportive, and should now be resistive. Ultimately, this market might offer a bit of a bounce, but I do not think that we are ready to change the trend yet. With this, I prefer short-term charts.
GBP/USD Weekly Forecast for November 14-18
GBP/USD moved higher during last Thursday’s trading and followed through to the upside on Friday, closing out the week at 1.2596, up 0.66% over the prior Friday’s close. The move higher has resulted in a breakout above resistance at the November 4th 1.2557 high, leaving the target at key resistance at the lows established in July at 1.2798 and mid-August at 1.2866.
A sustained breakout above this zone of resistance is required to suggest GBP/USD has established an important bottom has further room to move on the upside throughout the rest of the year.
As a result of last week’s rally, GBP/USD is now heavily overbought on a daily basis according to the Stochastic, a price momentum indicator. Thus, the week could kick off with a move to the downside.
Support on a near term pullback is at the upper boundary of the previous 5-day trading range, at 1.2557. Maintaining above this level would keep the bias in the pair firmly bullish and the target at the July/August lows.
The economic calendar in the U.K. next week is busy. U.K. CPI is due out Tuesday, with price growth forecast to be 1.1% YoY and 0.2% MoM, from 1% and 0.2% respectively in September. Core CPI expected to be 1.6% from 1.5%. Then on Wednesday, U.K. unemployment data is set for release. October claimant count is forecast to fall by 900, after rising by 700 in September, while the September unemployment rate rises to 5% from 4.9% in August. Average earnings (including bonuses) for September are expected to rise by 2%, down from August’s 2.3%. U.K. retail sales for October will be released on Thursday and is expected to rise 4.6% YoY and 0.3% MoM, from 4.1% and 0% in September. Bank of England Governor Carney is also set to deliver a speech next week.
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UK Unemployment Declines To 11-Year Low Of 4.8%, Underlying Tone More Fragile
The UK unemployment claimant count increased 9,800 for October, which was higher than the expected rise of around 2,000. This was the largest increase for five months and followed an increase of 5,600 for September, which was originally reported as an increase of 700.
The significant monthly revisions to the claimant count will also maintain fears surrounding the data’s accuracy and the data overall suggests a less robust labour market.
In contrast, the unemployment rate declined to 4.8% from 4.9% and below expectations of an unchanged 4.9%. This was the lowest recorded rate for 11 years and will help sustain near-term confidence in the outlook.
Employment increased by 49,000 in the three months to September and 461,000 compared to September 2015, much slower than the 172,000 gain for the previous three months.
The headline increase in average earnings was unchanged at 2.3% compared with a slight increase to 2.4%, while the figure excluding bonuses increased slightly to 2.4% from 2.3% previously.
The Bank of England will continue to watch the earnings data closely for evidence of potential underlying inflationary pressures and the degree of labour-market slack. Next year is likely to be the crucial period, especially if the headline inflation rate moves significantly higher, which will tend to put upward pressure on wage claims. The data at current levels will not cause concern to the bank.
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October 2016 UK retail sales 1.9% vs 0.4% exp m/m
Details of the October 2016 UK retail sales data report 17 November 2016
GBP/USD Extends Decline, Testing Support
GBP/USD continues its slow drift lower in today’s session, with the pair now testing first support at the November 8/9 lows at 1.2348, which represent a test of the upper boundary of the trading range that encompassed price action following the October 7th crash. The pair is currently holding near the 1.2360 level, down 0.47% from Thursday’s North American close. Today’s intraday low stands at the 1.2301 level.
On a break below the support being tested, the target becomes the lower boundary of the trading range at the 1.2083 level, followed by the low of the crash that took place October 7th, at 1.1950.
Despite the recent intraday rally attempts, the broader bias in GBP/USD has remained firmly to the downside, given the strong tone of the dollar. The dollar is currently trading at 101.29, up 0.34%. For the week overall, the greenback is up 2.2%. A round of strong data and hawkish comments by Federal Reserve Chair Janet Yellen sent the greenback soaring in yesterday’s trading, as the probabilities of an interest rate increase at the December 13-14 FOMC meeting continue to increase. At present, fed fund futures are pricing in a 95.4% probability of an interest rate increase at the December FOMC meeting, up from 90.6% in yesterday’s trading and up from 85.8% at the start of the week.
The slow drift lower in GBP/USD appeared set to continue heading into the weekend, as the dollar was expected to maintain a strong tone, given the absence of key data on today’s US economic calendar. In addition, the Stochastic, a price momentum indicator, is moving lower but still above oversold levels, suggesting the path of least resistance is to the downside.
With dollar strength dominant and support now in play, it appears that next week could kick off with a break of support, a development that could lead to swift follow through to the 1.2083 level.
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GBP/USD forecast for the week of November 21, 2016
The GBP/USD pair fell during the past week, as we now find yourselves testing the 1.23 region. Because of this, I think that the market is going to continue to go lower, B may be better served using the daily charts, or even shorter-term charts beyond that. I think that the market will try to reach towards the 1.21 handle below, and perhaps even down to the 1.20 level. Given enough time, we could break down below that level but at this point I am only anticipating a move to that region, and of course that means that we have to be bearish.
GBP/USD Weekly Forecast for November 21-25
GBP/USD lost ground in each session throughout last week’s trading, falling 2% for the week overall. The losses were driven by strength in the dollar, which rose sharply, to levels not traded since 2003. However, amid the majors, the GBP is holding up best versus the dollar.
As a result of the decline in GBP/USD, the pair is heading into next week testing support at the upper boundary of the trading range which encompassed price action following the October 7th flash crash in the sterling. A drop below this support would leave the target at the lower boundary of the trading range at the 1.2083 level, with the next target becoming the low of the crash at 1.1950.
With strength in the dollar expected to remain a dominant theme amid the currency markets, further losses in GBP/USD appear likely. However, there is the potential for rally attempts over the near term, given the extreme overbought condition of the dollar. This overbought condition, combined with the test of support underway in GBP/USD, suggests next week’s trading could be characterized by a countertrend move in the pair.
On a rebound, resistance is at the 1.2505 level, representing last Thursday’s high, which is in the same vicinity as the high established on Wednesday, as well as the 50% retracement of the decline from the November 11th intraday high to Friday’s intraday low. Signs of hesitation on the approach of this level would suggest the countertrend move is running out of steam and that renewed selling may begin to emerge.
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Details from the November 2016 UK CBI industrial trends report 22 November 2016
GBP/USD Breaks Down Below Intraday Support
GBP/USD is under pressure in today as the dollar is trading with a firmer tone following the release of strong US Existing Home Sales. GBP/USD is currently holding near the 1.2435 level, down 0.47% from Monday’s North American close.
As a result of the decline, the pair has broken down below intraday support at the 1.2449 level. The drop below this support suggests Monday’s rebound represents a failed test of overhead resistance at the 1.2505 level, the high established in the middle of last week’s trading, as well as an approximate 50% retracement of the decline from the November 11th intraday high to Friday’s intraday low.
The target for GBP/USD is now at the next level of support, at last week’s 1.2300 low, which represents a test of the upper boundary of the trading range which encompassed price action following the October 7th flash crash in the sterling. Failing to hold this support would leave the target at the lower boundary of the trading range at the 1.2083 level, followed by the low of the crash at 1.1950.
On another attempt to move higher over the near term, GBP/USD must clear the just broken 1.2449 level in order to suggest another attempt at the now reinforced 1.2500 level is possible. With strength in the dollar expected to remain a dominant theme amid the currency markets, the ability of GBP/USD to produce a sustained rally over the near term appears unlikely.
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