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British Pound Looks to Extend its Recovery

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Looking at the British pound (GBP) on the above GBP/USD daily MT 4 chart, this key Forex market has turned towards the upside, at least for now. Fundamentals simply do not support the sterling dollar.

The GBP/USD currency exchange rate is trading above the one hundred and two hundred (100, 200) daily simple moving averages (SMA) and below the short term fifty (50) day SMA).

There is not a lot on the economic calendar for Monday. The United States will publish their monthly core and headline consumer price index (CPI) data but the economic calendar in the European Union is quiet with no high impact events.

The United Kingdom also has no economic data on their calendar. However, British pound traders will pay close attention to the Governor of the Bank of England Andrew Bailey and Monetary Policy Committee member Haskell who are delivering commentary during the day.

The inflation data out of the United States could drive price volatility with the greenback, but the lack of data could see some price drifting with the British pound. Forex traders will pay close attention to coronavirus (Covid-19) news as Berlin, and Paris have closed restaurants and pubs at night and Madrid has declared a state of emergency and new lockdown.

Scotland has also closed nightlife in the center of the region. Traders will also watch stalled Brexit talks as well as ongoing political drama out of the United States where a contentious presidential election is stealing the show and no progress on further fiscal stimulus is not helping sentiment across the financial markets.

Daily British Pound Technical Analysis (GBP/USD)

Looking at the above GBP/USD price action chart, the relative strength index (RSI) is looking rather stable. There is key upside resistance lining up at 1.30 which has capped past recoveries several times. This key barrier is supported by the fifty day simple moving average.

The next upside barrier lines up at 1.3050, which is a former supper level from August. The next layers of technical resistance line up at 1.3195 and 1.3280.

On the downside the GBP/USD Forex market notes a layer of technical support in play at 1.2840 with next layer of technical support lining up at 1.28. The 200 day simple moving average comes into plat 1.2710 with the downside barrier lining up at 1.2670 then popping up on the radar.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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euro, pound, british

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