GBPUSD Price Analysis: Short-Term Uptrend Remains in Place
Sterling (GBP) Talking Points:
- Sterling remains positive against the US dollar with further gains expected.
- US dollar below all three moving-averages.
The DailyFX Q3 GBP Forecast is available to download.
GBPUSD Rally to Continue in the Short-Term
A reasonably strong GBPUSD technical set-up should see the pair move higher as all three moving- averages are left in the rear-view mirror. The pair currently trade around 1.3050 and sit comfortably in the middle of a defined uptrend started on September 5. The move higher has pushed GBPUSD above all three moving-averages and currently targets the recent - September 11 - high at 1.30883.The move may be stalled if the Bank of England dampens interest rate expectations at today’s policy meeting – the next UK rate hike is priced in for August 2019 although the May meeting is gathering momentum - but with Brexit talks taking a slightly more positive turn of late, Sterling should remain supported and rangebound.
GBPUSD Four Hour Price Chart (August 10 – September 13, 2018)
IG Retail Sentiment data show that retail traders are 68.2% net-long GBPUSD giving us a bearish contrarian trading bias.See how daily and weekly changes can change sentiment.
US Dollar Firm but Conciliatory Trade Talks Weigh
The US dollar rally stalled yesterday on news that the US has offered an olive branch in trade talks with China, deescalating market fears, while NAFTA talks continue to press ahead. In contrast to GBPUSD, the dollar index (DXY) now trades below all three moving-averages and may struggle to break back through the 94.70 – 95.20 range.
US Dollar Index (DXY) Four Hour Price Chart (August 1 – September 13, 2018)
--- Written by Nick Cawley, Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.