GBP/USD Forecast: Taking a breath before next move

Mario Blascak, PhD Independent Analyst

After reaching a new post-Brexit high of $1.3836 overnight, the GBP/USD is correcting lower limited by $1.3550 level representing 61.8% Fibonacci retracement line of post-Brexit slide lower.

With little-to-no news on the macro calendar scheduled for Wednesday, the GBP/USD is driven by market sentiment, especially concerning the US Dollar. There is a public appearance of the Bank of England Monetary Policy Committee member Michael Saunders scheduled for the mid-day, with his comments at the Financial Intermediary and Broker Association meeting in London expected to be rather general. Ahead of the Bank of England February Inflation report it is unlikely for the MPC members to comment on prospects for the UK economy or/and monetary policy.

The GBP/USD is moving in a sideways trend after jumping to post-Brexit highs recently and it will need another impact to continue in its Bullish run of late. As the GBP/USD is moving in tandem with EUR/USD and the ECB officials send Dovish signals regarding Euro’s current strength, both currency pairs are likely to move sideways for now.

Technical oscillators are painting picture of a corrective move sideways as well with both Slow Stochastics and the Relative Strength Index moving downwards from the Overbought territory. The momentum indicator is also pointing downwards on a daily chart.

GBP/USD daily chart

Author

Mario Blascak, PhD

Independent Analyst

Dr. Mário Bla&scaron;čák worked in professional finance and banking for 15 years before moving to journalism. While working for Austrian and German banks, he specialized in covering markets and macroeconomics.

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