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British Pound Price Forecast: GBP/USD, GBP/JPY, EUR/GBP, GBP/CAD

British Pound Price Forecast: GBP/USD, GBP/JPY, EUR/GBP, GBP/CAD

2020-08-01 20:00:00
James Stanley, Strategist
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GBP/USD, GBP/JPY, EUR/GBP, GBP/CAD Price Analysis

British Pound Breaks Out, GBP/USD Above the 1.3000 Psychological Level

It was another big week for the British Pound, particularly against the US Dollar as GBP/USD jumped back above the 1.3000 handle for the first time since the March sell-off. Traditionally, that psychological level has shown a tendency to put a pause into the move, at the very least; but nothing like that showed up this week as a combo of British Pound strength with aggressive US Dollar weakness catapulted the pair by more than 300 pips.

Bulls remained large-and-in-charge into Friday trade, at which point buyers pulled back as the March swing-high came into view, helping to produce what’s so far been a mild pullback in the move. But, assuming this candle finishes the day in positive territory, we’d be looking at 11 straight days of GBP/USD gains, capped off by an inverted hammer formation (non-completed).

GBP/USD BEARISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 8% 1% 3%
Weekly 2% 2% 2%
GBP/USD Retail Sentiment
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The forecast for GBP/USD will be set to bullish for the week ahead; and a pullback to the 1.3000 level may open the door for such.

GBP/USD Technical Forecast: Bullish

GBP/USD Daily Price Chart

GBPUSD Daily Price Chart

Chart prepared by James Stanley; GBPUSD on Tradingview

GBP/JPY Nears the Danger Zone

It was a similarly strong week in GBP/JPY as the pair gained more than 300 pips while breaking out to fresh monthly highs. Of course, for anyone observing USD/JPY it was fairly clear how weak the US Dollar has been; but this shows clear evidence of the British Pound being stronger than both the USD and JPY, and as the door opens into next week the question is just how bullish might buyers remain to be?

We’re currently seeing resistance around the 61.8% Fibonacci retracement of the December 2019 – March 2020 major move. This is the same level that helped to turn around the advance in June, and even if this area can be taken-out, another potentially larger resistance zone sits ahead.

The span around the 140 psychological level also includes a couple of longer-term Fibonacci levels; and the confluence of all of these possible reasons for bears to come into the matter could become a challenge for bulls should the advance continue.

GBP/JPY MIXED
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -3% -6% -5%
Weekly 7% 18% 12%
GBP/JPY Retail Sentiment
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While the trend is attractive and the prospect for continuation remains, to some degree, the plot of resistance ahead raises the bar for bulls and, thusly the forecast will be set to neutral for the week ahead.

GBP/JPY Technical Forecast: Neutral

GBP/JPY Daily Price Chart

GBP/JPY Daily price Chart

Chart prepared by James Stanley; GBPJPY on Tradingview

EUR/GBP Back to the .9000 Big Fig

It’s been a bit slower in EUR/GBP of recent and the pair has spent more than two months now fighting around the .9000 level. This week marked yet another return of price action to the big figure, following the touch-and-go inflection off of that same price last week.

EUR/GBP BULLISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -12% 0% -5%
Weekly -19% 15% -1%
EUR/GBP Retail Sentiment
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At this point, it can be difficult to project any near-term trends here given how well-established this range has become; so for next week the forecast will be set to neutral due to that lack of range. However, for traders looking for some mean reversion to work with, EUR/GBP may be of interest.

EUR/GBP Technical Forecast: Neutral

EUR/GBP Daily Price Chart

British Pound Price Forecast: GBP/USD, GBP/JPY, EUR/GBP, GBP/CAD

Chart prepared by James Stanley; EURGBP on Tradingview

GBP/CAD Explodes – More to Come?

It was an explosive week in GBP/CAD as the pair had, at one point, gained more than 500 pips. I had written an article on the Canadian Dollar on Thursday, noting how the lack of continued sell-off in USD/CAD, even as the US Dollar was pushing to fresh two-year-lows, was indicative of CAD-weakness helping to offset some of that USD-weakness. And, sure enough, if that CAD weakness is applied to the strength in the British Pound, GBP/CAD enjoyed quite the outing this week.

GBP Forecast
GBP Forecast
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For next week, that strength may remain in focus and the door could be open for continuation. There are a few pullback levels of note that could be investigated for support potential, such as the 1.7500 major psychological level or, perhaps a bit deeper, the 1.7432 Fibonacci level; each of which could keep the door open for a continuation of higher-highs and higher-lows.

GBP/CAD Technical Forecast: Bullish

GBP/CAD Daily Price Chart

GBPCAD Daily Price Chart

Chart prepared by James Stanley; GBPCAD on Tradingview

--- Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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