Pound rebound fading (GBPUSD forecast)

Intermediate
  • Growing anticipation of the re-opening of the economy in Europe, given the plateauing of coronavirus deaths and cases in Europe (and in some US States), has seen global financial markets move into a “risk on” theme this week.
  • The major US stock and European averages have broken higher to new recovery highs, which has broadly sent the US Dollar lower against most currencies, particularly versus the “risk” currencies; AUD, NZD, CAD.
  • However, the reserve currencies, such as the Euro and Pound have performed less impressively against the US dollar, with rebounds starting to fade.
  • Here we look at the fading rebound for the Pound against the US Dollar, GBPUSD.

GBPUSD day trade outlook: Bias still lower, despite further bounce

Again, a push higher Tuesday above 1.2492 resistance, but stalling from below 1.2526, at 1.2518 and whilst below this area (1.2518/26) to leave negative pressures from the latter April plunge below key 1.2287 (for an intermediate-term shift from bullish to neutral), to just keep risks lower into Wednesday.

·      We see a downside bias for 1.2360; a break below aims for 1.2300/1.2298 and 1.2247

·      But above 1.2518/26 targets 1.2574, which we would look to try to cap. Above aims for key 1.2647.

GBPUSD intermediate-term outlook

The latter April selloff below 1.2287 saw an intermediate-term shift from bullish to a broader range we see as 1.2163 to 1.2647.

  • Downside risks: Below 1.2163 sets an intermediate-term bear trend for 1.1639 and maybe 1.1410.
  • Upside risks: Above 1.2647 sets an intermediate-term bull trend for 1.3200 and maybe 1.3515.

4 Hour GBPUSD Chart

GBPUSD chart

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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