Top Story

GBP/USD rises towards major highs ahead of key events

Though the recently pressured US dollar was on the rebound on Thursday, British pound strength helped boost GBP/USD to extend its rise towards a retest of its late-March highs above 1.4240.

The dollar’s rebound on Thursday was driven in part by Wednesday’s release of relatively hawkish minutes from the last FOMC meeting in March, which indicated a nearly unanimous outlook by Fed members for higher US growth and interest rates going forward.

Sterling’s rise on Thursday, however, eclipsed the dollar rebound, extending the recent GBP/USD push towards January’s 1.4300-area post-Brexit-referendum highs. Thursday’s pound strength occurred as markets awaited scheduled remarks by Bank of England Governor Mark Carney later in the day. Looking further ahead to next week, some key UK-related economic data will be released, which will likely have a substantial further impact on the pound and GBP/USD. These releases will include UK wage growth and unemployment on Tuesday, consumer price index inflation readings on Wednesday, and retail sales on Thursday.

From the US next week, the release schedule is relatively light, but will feature US retail sales on Monday. Amid this light US calendar of events in the week ahead, geopolitical concerns should continue to take center stage for dollar traders.

From a technical perspective, as noted, GBP/USD on Thursday retested its late-March highs above 1.4240. In the process, the currency pair also extended its approach towards January’s 1.4344 high, a level not seen since the UK’s Brexit referendum in June of 2016 caused a massive sterling plummet. The overall trend throughout 2017 and into 2018 has been decidedly bullish. Most recently, a pullback in late March and early April saw GBP/USD hold and rebound above its key 50-day moving average. Since then, the sharp surge for the currency pair in April thus far has been helped along by a well-supported pound and a struggling US dollar. Amid next week’s UK economic releases and ongoing geopolitical uncertainty, GBP/USD could be poised for a possible breakout move. Though the March rise failed to break the post-Brexit high, there is a potential for such a breakout on the current surge if upcoming UK data and persistent dollar weakness support it. With any clear and sustained breakout above the 1.4300 resistance area, the next major upside objective on an extension of the current uptrend is around the 1.4500 psychological target level.


Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

The markets are moving. Stop missing out.

OPEN AN ACCOUNT