GBP/USD Forecast: consolidating at highs

Valeria Bednarik FXStreet

The GBP/USD pair eases modestly from a daily high of 1.2569 after London's opening, trading around the 1.2530 region, holding on to its weekly gains, but still lacking clear directional momentum. The Pound benefited from broad dollar's weakness, after US policy makers hit the wires late Thursday with FED's Lockhart saying that the FED could raise rates in any of the upcoming three meetings, somehow reducing hopes for a March hike, and US Treasury Secretary Mnuchin hinted the government's preference for a weaker dollar. That said, is clear that the Pound continues lacking life of its own, and that upcoming movements will depend on dollar's developments.

In the data front, the UK released January Mortgage Approvals, better-than-expected, and at a fresh 12-month high. The British Bankers' Association approved 44,657 mortgages in January, up from 43,581 in December.

The technical picture is neutral-to-bullish, as in the 4 hours chart, the price holds above a bullish 20 SMA, and around the higher end of its latest range, while technical indicators are retreating within positive territory, showing limited buying interest. An upward acceleration through 1.2560, however, should favor an extension to fresh daily highs of 1.2660, while beyond this last 1.2705 is the next resistance and probable bullish target.

Below 1.2490 on the other hand, the risk turns towards the downside, with scope to fall down to the 1.2430/50 price zone.

View live chart of the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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