GBPUSD Forecast and Technical Analysis Week of 16-20 July
GBPUSD dropped wild after US President Trump condemned UK PM May’s Brexit strategy and stated that Boris Johnson would make a great Prime Minister in an interview with The Sun. After dropping to test 1.3100 at the European session open, GBPUSD rallied back to trade above 1.3200 as Trump changed his tune completely, saying that “no matter what the Brexit plan is, he finds Theresa May successful” and “trade agreements between U.K and U.S will continue.”
We saw that Brexit and politics related news had a greater influence on the currency pair than a tentatively optimistic macro picture of the UK economy.
The UK growth confirmed solid recovery of the UK economy after the first-quarter adverse weather-related slowdown.
This week we will have the most important UK macro indicators including inflation, UK labor market data, and the UK retail sales.
UK fundamentals are supporting the BoE rate hike expectations however technicals continue to send bearish signals.
Daily Charts :
GBPUSD is trying to hold above 1.31000 support – Fibonacci 50% of the 1.1900 – 1.4300 move – The pair ended the week in the upper Bollinger Band above MA 20. RSI headed North but it is still in the bearish territory. The trend is strongly Bearish.
The technical picture on GBPUSD on the H4 chart is turning bullish. Cable ended the week above EMA 50. RSI is at the positive territory and headed North.
1.32450 appears to be the key level once again for intraday traders. Break and close above 1.32450 – 132500 may lead the price 1.32800 and 1.33100.
A few H4 closings below 1.32500 may put the pair under bearish pressure. This pressure may carry the price 1.31000 – 1.30000 zone.
Key Levels for Monday:
Upside: 1.32500 1.33000 1.33600
Downside: 1.32140 1.31800 1.31200
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