GBP/USD Forecast – British Pound Upsides Remain Limited Vs US Dollar

GBP/USD Forecast – British Pound Upsides Remain Limited Vs US Dollar

  • – The British Pound declined heavily recently and moved below 1.3400 against the US Dollar.
  • – There is a key bearish trend line formed with resistance at 1.3420 on the hourly chart of the GBP/USD pair.
  • – Recently in the US, the Manufacturing Purchasing Managers Index (PMI) for May 2018 (prelim) released by the Markit Economics.
  • – The outcome was above the forecast of 56.5 as there was a rise in the PMI from 56.5 to 56.6.

 

US Manufacturing Purchasing Managers Index

Recently in the US, the Manufacturing Purchasing Managers Index (PMI) for May 2018 (prelim) released by the Markit Economics. The market was positioned for no change in the PMI from the last reading of 56.5.

 

The actual result was above the forecast of 56.5 as there was a rise in the PMI from 56.5 to 56.6. Moreover, the Flash U.S. Composite Output Index increased from the last reading of 54.9 to 55.7, and the U.S. Services Business Activity Index climbed to 55.7 from 54.6.

 

The GBP/USD pair is currently correcting higher, but upsides are likely to be capped by the 1.2400 and 1.2420 resistance levels.

 

GBP/USD Technical Analysis

The British Pound was under a lot of pressure this week as it started a major downside move from well above 1.2500 against the US Dollar. The GBP/USD pair tumbled and declined below the 1.2450 and 1.2400 support levels, and it even settled below the 100 hourly simple moving average.

 

GBP/USD Technical Analysis British Pound US Dollar

 

The pair traded as low as 1.3304 and it is currently correcting higher. It has moved above the 23.6% Fib retracement level of the last decline from the 1.3491 high to 1.3304 low. However, there are many resistances on the upside near 1.2400.

 

An initial resistance is around the 50% Fib retracement level of the last decline from the 1.3491 high to 1.3304 low at 1.3398. Moreover, there is a key bearish trend line formed with resistance at 1.3420 on the hourly chart of the GBP/USD pair.

 

Therefore, if the pair moves higher from the current levels, it is likely to find sellers on the upside near 1.3400 and 1.3420.


Also published on Medium.

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