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Latest GBP USD Analysis and Forecasts

Pound risk flips higher, for now – GBPUSD forecast

  • A more positive tone for the Pound to start this week, for now rejecting the more negative tone we highlighted in our report here last week.
  • The broader “risk off” theme has eased as global stock indices have rebounded since Friday which has seen a slight weakening of the US Dollar.
  • The Pound also benefited Monday from some positive soundings and hopes regarding the UK trade negations with the EU, which restart this week.
  • Below we again look at the technical analysis foe GBPUSD and the near-term upside risks for today and month-end, though for now the bigger picture threat into October stays bearish.

GBPUSD day trade outlook: Threat shifts higher

A strong recovery Monday to overcome resistance at 1.2805 and 1.2867/71, plus reversing above the September down trend line, to for now reject bear forces from latter September sell-off through various supports (after the earlier September plunge through key 1.2981to shift the intermediate-term outlook to bearish), to keep the risk to the downside Tuesday. 

Day trade setup

  • We see an upside bias for 1.2929 and 1.2967; a break here aims for key 1.3007 and maybe the 1.3035/56 area.
  • But below 1.2822 opens risk down to 1.2762 and possibly 1.2687/75.

GBPUSD intermediate-term outlook

The early September push below 1.2981 signalled an intermediate-term shift to a bear trend.

  • Downside risks: We see an intermediate-term bear trend to aim for 1.2644, 1.2480 and maybe 1.2251.
  • What changes this? Above 1.3007 shifts the intermediate-term bear trend to neutral; through 1.3239 to an intermediate-term bull trend.
6 Hour GBPUSD Chart
6 Hour GBPUSD Chart

Please join the GBP USD discussion

    1. The Pound (GBP) is falling against most currencies today due to the release of the UK GDP, Manufacturing and Industrial Production data. Practically all elements of the is report were negative, with the quarterly contraction in GDP the first since 2012 indicating a weakening economy.
      This layers on top of ongoing fears about a “No Deal” Brexit and the threat that the Bank of England may need to cut interest rates. All of these factors are negative for the currency, hence the move lower for GBPUSD and GBPJPY, plus the move higher for EURGBP.
      Also, from a technical analysis perspective, GBPUSD, EURGBP and GBPJPY are moving to multi-year extremes, which sends a negative signal for GBP.
      Hope this helps, please revert with any further questions.

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