Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
British Pound Brexit Chaos GBP Trend Forecast - 18th Oct 19
Stocks Don’t Care About Trump Impeachment - 17th Oct 19
Currencies Show A Shift to Safety And Maturity – What Does It Mean? - 17th Oct 19
Stock Market Future Projected Cycles - 17th Oct 19
Weekly SPX & Gold Price Cycle Report - 17th Oct 19
What Makes United Markets Capital Different From Other Online Brokers? - 17th Oct 19
Stock Market Dow Long-term Trend Analysis - 16th Oct 19
This Is Not a Money Printing Press - 16th Oct 19
Online Casino Operator LeoVegas is Optimistic about the Future - 16th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - Video - 16th Oct 19
$100 Silver Has Come And Gone - 16th Oct 19
Stock Market Roll Over Risk to New highs in S&P 500 - 16th Oct 19
10 Best Trading Schools and Courses for Students - 16th Oct 19
Dow Stock Market Short-term Trend Analysis - 15th Oct 19
The Many Aligning Signals in Gold - 15th Oct 19
Market Action Suggests Downside in Precious Metals - 15th Oct 19
US Major Stock Market Indexes Retest Critical Price Channel Resistance - 15th Oct 19
“Baghad Jerome” Powell Denies the Fed Is Using Financial Crisis Tools - 15th Oct 19
British Pound GBP Trend Analysis - 14th Oct 19
A Guide to Financing Your Next Car - 14th Oct 19
America's Ruling Class - Underestimating Them & Overestimating Us - 14th Oct 19
Stock Market Range Bound - 14th Oct 19
Gold, Silver Bonds - Inflation in the Offing? - 14th Oct 19
East-West Trade War: Never Take a Knife to a Gunfight - 14th Oct 19
Consider Precious Metals for Insurance First, Profit Second... - 14th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - 13th Oct 19
The Most Successful IPOs Have This One Thing in Common - 13th Oct 19
Precious Metals & Stock Market VIX Are Set To Launch Dramatically Higher - 13th Oct 19
Discovery Sport EGR Valve Gasket Problems - Land Rover Dealer Fix - 13th Oct 19
Stock Market US Presidential Cycle - Video - 12th Oct 19
Social Security Is Screwing Millennials - 12th Oct 19
Gold Gifts Traders With Another Rotation Below $1500 - 12th Oct 19
US Dollar Index Trend Analysis - 11th Oct 19
China Golden Week Sales Exceed Expectations - 11th Oct 19
Stock Market Short-term Consolidation Does Not change Secular Bullish Trend - 11th Oct 19
The Allure of Upswings in Silver Mining Stocks - 11th Oct 19
US Housing Market 2018-2019 and 2006-2007: Similarities & Differences - 11th Oct 19
Now Is the Time to Load Up on 5G Stocks - 11th Oct 19
Why the Law Can’t Protect Your Money - 11th Oct 19
Will Miami be the First U.S. Real Estate Bubble to Burst? - 11th Oct 19
How Online Casinos Maximise Profits - 11th Oct 19
3 Tips for Picking Junior Gold Stocks - 10th Oct 19
How Does Inflation Affect Exchange Rates? - 10th Oct 19
This Is the Best Time to Load Up on These 3 Value Stocks - 10th Oct 19
What Makes this Gold Market Rally Different From All Others - 10th Oct 19
Stock Market US Presidential Cycle - 9th Oct 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast Oct - Dec 2019 by Nadeem Walayat

British Pound Rallies Higher Against US Dollar

Currencies / British Pound Aug 23, 2017 - 02:51 PM GMT

By: Richard_Cox


Currency markets are starting to shake the summer doldrums that are typically characterized by weak trading volumes and low price volatility, and one of the primary beneficiaries has been the British Pound (GBP).  Markets are still being forced to deal with the potential implications that could unfold after the next round of Brexit negotiations but the broader global interest rate story still seems to be setting the tone for the currency relative to the US Dollar.  When viewing the forex markets in terms of the GBP/USD, bullish trends look much more pronounced and investors are wondering about whether or not it is time to establish larger positions in the cable.

Of course, this strength in the GBP has not been seen against the Euro.  When viewed through currency pairs like the EUR/GBP, the trend scenario is quite different and we have even seen analyst speculation suggesting a growing possibility that the European Central Bank (ECB) might even be forced to intervene in the forex markets in order to prevent further strength in the Euro currency.

But within the British economy itself, the central issue continues to be the Brexit negotiations as there are still significant questions about how with will impact instruments like the FTSE 100 into the final months of this year.  The Bank of England would prefer not to see excessive volatility in stock markets and so it is expected that the central bank will do everything in its power to allay investor fears and avoid potential uncertainties.

For investors that are specifically focused on the forex markets, it will also be important to note the possible changes in monetary policy focus that will be highlighted by the Federal Reserve.  There are still some differences in agreement with respect to whether the US central bank will continue raising interest rates this year.  The Fed has offered several dovish policy statements for the market’s consumption and this has led to downside pressure on the US Dollar given the expectations that we will not see any additional rate tightening for the US economy in the months ahead.  This creates opportunities for investors implementing strategies in CFD trading, as there are several markets (stocks, commodities, and currencies) which will likely be impacted by the outcomes in these areas. 

The next price levels to watch in the GBP/USD can be found at 1.2610 to the downside, and 1.3030 to the topside.  This area defines the immediate trading range on the hourly charts, which exists within a much broader uptrend channel on the daily charts.  Overall, the bias remains positively as long as we are able to hold above the 1.2610 area as any downside breaks here would likely lead to a test of the rising uptrend channel that we are now watching on the daily candlesticks.

Overall, traders will be weighing the outcomes of the next Brexit negotiations alongside the monetary policy statements that are made public by the US Federal Reserve.  These are ultimately the trends that should define the price directions that are seen as we start activity in 2018 and so there are very important implications that should develop once markets decide whether to test the top or bottom of the current trading range in the GBP/USD. 

By Richard Cox

© 2017 Richard Cox - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules