- GBP/USD has suffered from weak UK data but benefited from the US-Sino deal.
- The UK jobs report and forward-looking PMIs are critical to the next moves of the BOE and the pound.
- Early January's daily chart is painting a bullish picture.
GBP/USD Forecast Poll
The FXStreet Forecast Poll about GBP/USD (Pound US Dollar) is a sentiment tool that highlights our selected experts' near and medium term mood and calculates trends according to Friday's 15:00 GMT price.
How to Read the Forecast Poll charts
This chart informs about the average forecast prices, and also how close (or far apart) sit the numbers from all participants surveyed that week. The bigger a bubble on the chart means more participants targeting a certain price level in that particular time horizon. This distribution also tells if there is unanimity (or disparity) among participants.
Each participant's bias is calculated automatically based on the week's close price and recent volatility. Drawing from those results, this chart calculates the distribution of bullish, bearish, and sideways forecast prices from all participants, informing about sentiment extremes, as well levels of indecision reflected in the number of “sideways”.
By displaying three central tendency measures (mean, median, and mode), you can know if the average forecast is being skewed by
In this chart, the close price is shifted behind so it corresponds to the date when the price for that week was forecasted. This enables the comparison between the average forecast price and the effective close price.
This chart tracks the percentage change between the close prices. Bouts of volatility (or extreme flat volatility) can be then compared to the typical outcome expressed through the averages.
This measure is basically an arithmetical average of the three central tendency measures (mean, median, and mode). It smooths the typical outcome eliminating any possible noise caused by outliers.
Together with the close price, this chart displays the minimum and maximum forecast prices collected among individual participants. The result is a price corridor, usually enveloping the weekly close price from above and below, and serves as a measure of volatility.
WHAT IS THE FORECAST POLL AND WHY TO USE IT?
The Forecast Poll is a sentiment tool that highlights near- and medium-term price expectations from leading market experts. It is a sentiment indicator which delivers actionable price levels, not merely “mood” or “positioning” indications. Traders can check if there is unanimity among the surveyed experts - if there is excessive speculator sentiment driving a market - or if there are divergences among them. When sentiment is not at extremes, traders get actionable price targets to trade upon. When there is deviation between actual market rate and value reflected in predicted rate, there is usually an opportunity to enter the market.
You can also use the Outlook Poll for Contrarian thinking strategies. Gonçalo Moreira, Research expert at Fxstreet, explains: “People involuntarily follow the impulses of the crowd. Sentiment indicators, in turn, lead to “contrarian” thinking. The prediction helps traders detect sentiment extremes and thereby limit their eventual toxic herd behavior.” Read more on Contrarian Approaches with Sentiment indicators
HOW TO READ THE GRAPHS?
Besides the table with all participants’ individual prediction, a graphic representation aggregates and visualizes the data: the Bullish/Bearish/Sideways line shows the percentage of our contributors on each of these outlook biases.
This graph is available for each time horizon (1 week, 1 month, 1 quarter). We also indicate the average price prediction as well as the average bias.
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 is 1,3215. Read more details about the forecast.
In the last 7 months, 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 2017 for the Pound to US Dollar pair is the Brexit negotiations. Johnson’s is set to seek to pass legislation, which would require having a trade deal within months and make it illegal for the government to extend the Brexit transition period beyond the end of 2020. The UK will leave the EU on January 31 but will 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.
BONDS THAT INFLUENCE THE MOST GBP/USD
Bonds whose moves can impact the GBP/USD pair: T-BOND 30y; T-NOTE 10y; GILT 30y; BUND 30y; JGB 30y - GBP/USD traders should closely watch when trading it: UK 2y Gilt, UK 5y Gilt, UK 10y Gilt, UK 30y Gilt. This group also includes the following currency pairs: EUR/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD, USD/CAD, EUR/GBP and USD/CHF