Forex Market: GBP/USD daily forecast

During yesterday’s trading session GBP/USD traded within the range of 1.6724-1.6802 and closed at 1.6800.

At 7:04 GMT today GBP/USD was gaining 0.02% for the day to trade at 1.6796. The pair touched a daily high at 1.6820 at 1:00 GMT.

Fundamental view

United Kingdom

At 11:00 GMT Bank of England is to announce its decision on monetary policy. The benchmark interest rate will probably be left unchanged at 0.50%. Short-term interest rates are of utmost importance for the valuation of national currencies. In case the central bank left intact or raised borrowing costs, this would have a bullish effect on the sterling.

At the same time, the monthly pace of banks monetary stimulus will probably be left intact as well, at 375 billion GBP. The central bank issues new money in order to purchase gilts from private investors such as pension funds and insurance companies. In case monetary stimulus is increased (in order to further spur economic growth), this will usually devalue nations currency.

United States

The number of people in the United States, who filed for unemployment assistance for the first time during the week ended on April 5th, probably decreased to 320 000 from 326 000 in the prior week. This is a short-term indicator, reflecting lay-offs in the country. In case the number of initial jobless claims fell more than projected, this would have a bullish effect on the greenback. The Department of Labor is to release the weekly report at 12:30 GMT.

Technical view

According to Binary Tribune’s daily analysis, in case GBP/USD manages to breach the first resistance level at 1.6827, it will probably continue up to test 1.6853. In case the second key resistance is broken, the pair will probably attempt to advance to 1.6905.

If GBP/USD manages to breach the first key support at 1.6749, it will probably continue to slide and test 1.6697. With this second key support broken, the movement to the downside will probably continue to 1.6671.