Pound vulnerability eased as US Dollar weakens (GBPUSD Forecast)

Intermediate
  • Last week’s “risk on” theme has extended into this week, with many global stock averages surging to new cycle highs, whilst in the Forex space, the US Dollar has weakened, still seen as a safe haven during the current global health crisis.
  • This global positive outlook continues to be driven by hopes of a COVID-19 vaccine, alongside the easing of lockdown restrictions and restarting of the global economy.
  • Alongside a weakened US Dollar, the Pound has seen a rebound on a possible breakthrough in EU and UK trade deal talks, with apparent concessions from the EU on the difficult area of fisheries.
  • Here we look at the more positive technical outlook for the GBPUSD forecast.

GBPUSD day trade outlook: Threat shifts higher

A strong advance Tuesday to overcome 1.2249/50, 1.2296 and 1.2340 resistances, to reject the bear forces from the mid-May plunge below key 1.2163 (for an intermediate-term bearish shift), to switch the risk back higher Wednesday.

  • We see an upside bias for 1.2363, then 1.2378; a break above here aims for key 1.2467 and quickly then to 1.2483.
  • But below 1.2261/53 targets 1.2204, maybe even towards 1.2155.

GBPUSD intermediate-term outlook

The mid-May selloff below 1.2163 saw an intermediate-term shift from a broader range to bearish.

  • Downside risks: We see an intermediate-term bear trend for 1.1639 and maybe 1.1410.
  • What changes this? Up through 1.2467 sets an intermediate-term range theme again, above 1.2647 needed for a bull trend.

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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