British Pound Sterling Price News and Forecast: GBP/USD has room to rally

FXStreet Team FXStreet

GBP/USD Analysis: Is below 1.3200

Yesterday, the GBP/USD exchange rate reversed south from the Fibo 50.00% at 1.3200. During Tuesday morning, the rate was testing the 55-hour SMA near 1.3060.

If the given support holds, it is likely that a reversal north could occur, and the currency pair could try to surpass the given Fibonacci retracement in the short term.

Otherwise, it is likely that the exchange rate could continue to decline within the following trading session. In this case it is unlikely that the rate could decline below the Fibo 38.20% at 1.2922.

UK Budget Preview: Showing the way with fiscal stimulus? GBP/USD has room to rally

Cummings' cabinet coup – that now seems like a long-forgotten tidbit of British politics – may have a decisive impact on the pound.

Earlier this year, Prime Minister Boris Johnson announced a government reshuffle, which put the relatively unknown Rishi Sunak as Chancellor of the Exchequer instead of the more fiscally-prudent Sajid Javid. Johnson and his aide Dominic Cummings wanted to bring the special advisers of the PM and the chancellor under the guidance of 10 Downing Street – unifying the government's message. Moreover, they wanted someone that will follow the vision of infrastructure spending.

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