GBP/USD Forecast: positive Brexit headlines help reclaim 1.35 mark

Haresh Menghani FXStreet

On Thursday, the GBP/USD pair reversed a dip to a 7-day low level of 1.3320 and rallied around 165-pips on positive news surrounding the Irish border issue. The market defied persistent US Dollar strength, with the incoming Brexit headlines turning out to be an exclusive driver of the pair's movement over the past two-weeks.

The British Pound got an additional boost on Friday from the latest news mentioning that DUP leader Arlene Foster negotiated border issue with UK PM May through the early hours and will make a statement later on in the day. The pair has popped back above the key 1.3500 psychological mark as investors now look forward to any fresh headlines coming out of the UK PM Theresa May's meeting with the EU's Junker and Tusk.

On the economic data front, the release of UK manufacturing/industrial production, traded balance data and NIESR GDP estimate might influence the GBP movement. From the US, the key US monthly jobs data (NFP) would drive the greenback ahead of next week's FOMC meeting and might also help grab some short-term trading opportunities.

Technically, the pair might now be eyeing for a bullish break through a short-term descending trend-line resistance near the 1.3535 region, above which the upward trajectory is likely to accelerate towards the 1.3600 handle en-route post-Brexit swing high resistance near the 1.3655-60 region, touched in September.

Alternatively, any profit-taking might now find immediate support near the 1.3480 region, which if broken could drag the pair back towards 1.3430-25 area en-route the 1.3385 strong support. A convincing break below the mentioned support levels might now negate any near-term bullish bias and turn the pair vulnerable to head back towards retesting the 1.3320 support area ahead of the 1.3300 handle.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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