GBP/USD Forecast: dollar's weakness backs an upward extension

Valeria Bednarik FXStreet

The GBP/USD pair is battling the 1.3100 level, as the US Senate blocked the latest attempt to repeal Obamacare late Thursday, undermining the greenback. The bill that would resulted in 6 million people losing their health insurance during the next 10 years, was voted down by 51 votes to 49, as three Republicans voted against it.

There are no macroeconomic events in the UK to take care of this Friday, with attention focused on US Q2 preliminary GDP data. The US is expected to have grew by 2.6%, well above a previously revised 1.4%, with a disappointing number backing further gains on the pair.

Technically, the 4 hours chart shows that the pair is finding short term buying interest around a bullish 20 SMA, whilst technical indicators hold flat above their mid-lines, lacking enough strength to back an upward extension. Anyway, the upside is favored amid broad dollar's weakness, with gains beyond 1.3100 pointing to a retest of the yearly high around 1.3160, en route to 1.3200. Below 1.3067, the daily low, the risk turns towards the downside, with scope then to extend its slide down to the 1.3000/20 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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