Pound / Dollar Outlook: A strong continuation up toward 1.5700 is likely later this week
The Pound to US Dollar exchange rate has rallied to 1.5593, "just a stone’s throw from key resistance, after long legged doji indicated a reversal," says Ipek Ozkardeskaya at Swissquote.
Ozkardeskaya says trend and momentum indicators are marginally bullish combined with strong data suggests that current rally has legs to run, "we would buy on dips as initial trigger level is at 1.5600 should lead to an rally extension to 1.5752."
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Swing forecast favours gains for British Pound
The latest swing forecast from Matt Weller at GFT confirms the outlook favours the British Pound against the US Dollar:
| Fundamental Predictions: | |
| 1) Pound Dollar Forecasted Lower by RBS 2) Barclays Warn USD Likely to Advance Against British Pound |
"The GBP/USD has traded higher so far this week, helped along by better-than-expected data out of the UK, including strong Construction and Manufacturing PMI.
"As of writing, the pair is testing previous resistance at 1.5600, but if that ceiling is broken, a strong continuation up toward 1.5700 is likely later this week.
"To prepare for a possible breakout, traders could set a stop buy order at 1.5615 (above the 1.5600 round handle) with a stop at 1.5575 (back below the 1.5600 level) and a target at 1.5690 (ahead of the 1.5700 round handle)."
However, Investors likely to stay on the sidelines
Any clear-cut trends in the currency markets are however likely to remain hard to come by when considering the currency volatility being witnessed on the global foreign exchange markets.
Shaun Osborne at TD Securities says:
"A lot of event risk ahead this week should keep investors more or less sidelined near-term—and perhaps beyond through to the FOMC meeting later this month. The USD remains well supported overall, however, amid expectations that the FOMC will opt to start reducing asset purchases sooner rather than later. The USD will be sensitive therefore to the tone of the incoming key data releases."