GBPUSD breaks 1.30, can it rise higher?
GBPUSD has moved higher after some positive news on Brexit from Michel Barnier on the type of deal the UK might expect. The market has probably read too much into the comments but nonetheless we have seen GBPUSD rates rise over 1.30. To what extent is this likely to continue in the future?
Yesterday, Gross Domestic Product (GDP) was released showing 4.2% growth, this kind of pace will be very hard to keep up and some analysts are expecting to see a weaker US Dollar in the future as the high expectations that have been piled on the Greenback, start to cool down.
In terms of future events to move the US Dollar, the Federal Reserve Interest Rate Decision and Press Conference on Wednesday 26th is likely to be a big market mover. Many are expecting the Federal Reserve will raise rates and this might see the US Dollar stronger. What I feel is more likely however, will be a cooling in expectations over just how hot the US economy is going to become.
Donald Trump and his actions are also a factor on the US Dollar, he has been capturing lots of headlines with greater calls to impeach him. I do not personally think this will happen but following scandal engulfing his campaign manager and his attorney, he could easily find himself in the firing line.
GBPUSD rates could now rise above 1.30 comfortably if we see a continuation of this new found positivity towards negotiations. I expect the Pound will continue to react sharply to the headlines on Brexit, the Pound could quickly sink as quickly as it has risen.
Overall, the recent strength for the US Dollar does seem likely to be tested and it will take some particularly good news to really see Sterling increase. A more likely outcome I feel would be weakness as the market waits for the reality to catch up with expectations, if it can.
For more information regarding strategy for any GBPUSD currency exchanges, please speak to me Jonathan Watson by emailing [email protected].
The post GBPUSD breaks 1.30, can it rise higher? appeared first on Pound Sterling Forecast.
Source: https://www.poundsterlingforecast.com/2018/08/gbpusd-breaks-1-30-can-it-rise-higher/
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