British Pound Outlook: GBP/USD May Go Along for the Ride
GBP/USD Price Highlights:
- GBP/USD techs aren’t the cleanest, but rally may get underway nevertheless
- Dollar could be headed for trouble on a break of the range
GBP/USD may be headed for rally this coming week
Cable hasn’t been a particularly easy handle as of late, looking like it could go either way much of the time. But that could change with a generally weaker USD helping propel currencies in a broad was manner. It during the past couple of days where we started to see real Dollar weakness come into play with EUR/USD trading higher. GBP/USD may be next.
The technical picture isn’t great here, but as long as the series of higher highs and higher lows can keep developing since the May 18 low, then a move back to the formidable 200-day could develop, where price stopped almost to the pip twice in April. The April peaks were at 12647, with the 200 having edged slightly higher since then to 12657.
A break lower and undercut of 12160 could prove detrimental to this outlook. At that juncture we would need to reassess the situation for a potential flip towards the downside. For now, running with a neutral to positive outlook, but that will hinge on the US Dollar, as seen via the DXY, breaking outside of a nearly two-month trading range. So far it is holding the bottom of the range, let’s see what this coming week brings.
GBP/USD Daily Chart (Not a great picture)
US Dollar Index (DXY) Daily Chart (working on range break)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at@PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.