GBP/USD Forecast and News


GBP/USD: Struggles between 200-HMA and short-term support line

GBP/USD pair’s pullback from 1.3009 reverses from 1.3065. The Cable trims gains following a U-turn from a seven-day-old support line. The reason could be traced from the pair’s inability to cross 200-HMA.

Latest GBP News


Technical Overview

The daily chart for GBP/USD shows that the pair spent the week in consolidative mode near its recent highs, with the positive momentum easing but far from suggesting a slide. The 20 DMA heads firmly higher below the current level and above the larger ones, as technical indicators ease from overbought readings. In the shorter-term, and according to the 4-hour chart, the pair has settled below its 20 SMA but holds above the larger ones. The Momentum indicator heads firmly lower within negative levels as the RSI consolidates around 42, all of which skews the risk to the downside.

Support levels: 1.3025 1.2980 1.2940

Resistance levels: 1.3065 1.3110 1.3160


Fundamental Overview

The pair hit a 1.3185 on Thursday, its highest since March, underpinned by the greenback’s sell-off and ignoring UK data and Brexit-related headlines. On this last, British Cabinet Minister Michael Gove said that he believes there will be a successful negotiation Brexit outcome with the EU, adding "we are making progress with the EU." No official comments, however, came from the Union.

Meanwhile, the UK is working on plans to reopen schools in September. According to the latest official data, the number of people in hospital being treated for coronavirus has fallen over 95% from the peak of the outbreak. Pubs and restaurants remain open in the kingdom, but alongside schools, could be closed in the case of an outbreak. Over the weekend, news indicated that using face masks has become mandatory in more indoor places in England, Scotland and Northern Ireland.



SPECIAL WEEKLY FORECAST

Interested in weekly GBP/USD forecasts? Our experts make weekly updates forecasting the next possible moves of the pound-dollar pair. Here you can find the most recent forecast by our market experts:

GBP/USD Weekly Forecast: Bear takeover? Upbeat UK GDP may be insufficient amid growing fears

The Bank of England's "glass-half-full" approach eventually surrendered to fears about the US economy, Sino-American relations, and coronavirus. Apart from these themes, two top-tier UK figures and an update on US consumption are closely watched. 

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GBP/USD Bullish Themes

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Latest GBP Analysis


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Editors' picks

EUR/USD: Interim top in place?

EUR/USD's daily chart shows a bearish divergence of key indicators. The daily chart shows a bearish divergence of the relative strength index and slow stochastic. A bearish divergence occurs when an indicator charts lower highs as opposed to higher lows, higher highs on price and is taken to be the sign of ebbing of bullish momentum. 

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GBP/USD: Struggles between 200-HMA and short-term support line

GBP/USD pair’s pullback from 1.3009 reverses from 1.3065. The Cable trims gains following a U-turn from a seven-day-old support line. The reason could be traced from the pair’s inability to cross 200-HMA.

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WTI bounces from 10-day SMA on Saudi Aramco’s comments

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GBP/USD YEARLY FORECAST

How could GBP/USD move this year? Our experts make a GBP/USD update forecasting the possible moves of the pound-dollar pair during the whole year. Don't miss our 2020 GBP/USD forecast!

2020 FORECAST FOR GBP/USD

In our GBP/USD Price Forecast 2020, our dedicated contributors expect a continuation of the bullish trend during the year. By the end of the year 2019, the average outlook for the pair was 1,3215. Read more details about the forecast.

From Jul 2019 to Jan 2020, the maximum level for the GBP/USD (Pound US Dollar) was 1.3740 (on 12/12/19), and the minimum, 1.2033 (on 08/11/20).

MOST INFLUENTIAL POLITICAL EVENTS IN 2020 FOR GBP/USD

Number one political event in 2020 for the pound to US dollar pair is the Brexit. The UK left the EU on January 31 but is expected to remain in the single market and customs union until December 31, 2020. The current arrangement allows the Brexit transitions period to be extended by mutual agreement for up to two years up. Apart from renewed Brexit uncertainty, investors will also take a closer look at UK economic fundamentals.


Influential Institutions & People for the GBP/USD

The Pound VS Dollar can be seriously affected by news or the decisions taken by two main central banks:

The Bank of England (BoE)

The Bank of England is the central bank of the United Kingdom. Established in 1694 and privately owned in the beginning, the Bank was nationalised in 1946 so now is completely owned by the UK government. BOE's main reason to be is to maintain monetary and financial stability in the country. Some of its other tasks are producing secure bank notes, operating asset purchase facility and keeping the inflation low and stable. The bank is overseen by the Court, named used to reffer the board of directors, and is accountable to Parliament and the public.

The Federal Reserve Bank (Fed)

On the other hand we found The Federal Reserve System (Fed) wich is the central banking system of the United States. Fed has two main targets: to keep unemployment rate to their lowest possible levels and inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors, partially presidentially appointed Federal Open Market Committee (FOMC). The FOMC organizes 8 meetings in a year and reviews economic and financial conditions. Also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth.


Andrew Bailey

Andrew Bailey is Governor of the Bank of England since 16 March 2020. He was announced as the new Governor of the BoE on 20 December 2019. Bailey was born in Leicester in 1959 and graduated from Queens' College with a BA in History and a PhD from the Faculty of History, University of Cambridge in 1985. Before becoming the Governor of the BOE, Andrew worked at the Bank in a number of areas, most recently as Executive Director for Banking Services and Chief Cashier, as well as Head of the Bank's Special Resolution Unit (SRU). Previous roles include Governor's Private Secretary, and Head of the International Economic Analysis Division in Monetary Analysis.

Jerome Powell

Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.

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About GBP/USD

The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. The pair is also called 'The Cable', referring to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term originated in the mid-19th century, which makes it one of the oldest currency pairs.

Pound Dollar represents two economies: British and American (from United States of America). The Cable is a widely observed and traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. After the result of the Brexit referendum, this pair has been suffering some turbulence due to risk related with the abandonment process from the European Union.

Related pairs

EUR/USD

The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity of Euro Dollar is due to the fact that it gathers two main economies: the European and American (from United States of America) ones. This is a widely traded currency pair where the Euro is the base currency and the US Dollar is the counter currency. Since the EUR/USD pair consists of more than half of all the trading volume worldwide in the Forex Market, it is almost impossible for a gap to appear, let alone a consequent breakaway gap in the opposite direction.

Normally, the EUR/USD is very quiet during the Asian session because economic data that affects the fundamentals of those currencies is released in either the European or U.S. session. Once traders in Europe get to their desks a flurry of activity hits the tape as they start filling customer orders and jockey for positions. At noon activity slows down as traders step out for lunch and then picks back up again as the U.S. comes online.

USD/JPY

The USD/JPY (or US Dollar Japanese Yen) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: EUR/USD, GBP/USD, AUD/USD, USD/CHF, NZD/USD and USD/CAD. Japanese Yen has a low interest rate and is normally used in carry trades. This is the reason why is one of the most trades currencies worldwide. In the USD/JPY the US Dollar is the base currency and the Japanese Yen is the counter currency. The pair represents American (from United States of America) and Japanese economies.

Trading the USD/JPY currency pair is also known as trading the "ninja" or the "gopher", although this last name is more frequently used when referred to the GBP/JPY currency pair. The US Dollar Japanese Yen usually has a positive correlation with the following two pairs: USD/CHF and USD/CAD. The nature of this correlation is due to the fact that both currency pairs also use the US Dollar as the base currency, such as USD/JPY. The value of the pair tends to be affected when the two main central banks of each country, the Bank of Japan (BoJ) and the Federal Reserve Bank (Fed), face serious interest rate differential.