GBP/USD Forecast: stuck in a familiar trading range, UK data and NFP awaited

Haresh Menghani FXStreet

The currency market seems to have stabilized after an initial reaction to Trump's order to strike a Syrian airbase, which was used to launch deadly chemical weapons on civilians. The US Dollar has managed to recover early Asian dip and remained supported by market expectations for yet another blockbuster jobs report for the month of March. Investors, however, remained wary of the Trump/Xi Jinping summit, where a bitter outcome could spook global financial markets and hence, refrained from placing any fresh bets, which has eventually led to a subdued trading action in the FX market.

GBP/USD

The GBP/USD pair remained capped below the key 1.25 psychological mark and was marginally lower during Asian session on Friday. Today's UK economic features the release of manufacturing and industrial production along with the goods trade balance data and the Halifax house prices index. Although today's UK data is unlikely to provide any directional impetus but a weaker reading could exert some temporary selling pressure around the British Pound.

Any follow through selling pressure below mid-1.2400s might continue to find support at 1.2420 confluence support, comprising of 100-day SMA and 38.2% Fibonacci retracement level of 1.2109-1.2616 up-move. A decisive break below this immediate strong support would negate possibilities of any further near-term recovery and is likely to accelerate the slide immediately towards 50% Fibonacci retracement level support near 1.2360 region. Below the 1.2400 handle, the pair remains vulnerable to eventually drop to its next major support near the 1.2300 handle, marking 61.8% Fibonacci retracement level.

Meanwhile, any up-move beyond 1.2480 level might continue to confront strong supply at the key 1.25 psychological mark, which if conquered decisively is likely to trigger a short-covering rally towards 1.2550-55 horizontal resistance. Momentum above mid-1.2500s could further get extended back towards March monthly highs resistance near 1.2615 level before the pair eventually head towards the very important 200-day SMA near mid-1.2600s, en-route 1.2680-85 resistance area marking 61.8% Fibonacci expansion level of 1.2109-1.2616 up-move and subsequent retracement.

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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