GBP/USD is probably forming a triangle pattern which began after the rebound from the October 2016 post-Brexit lows.
GBP/USD had been in a falling trend under the weight of a strengthening Dollar and the weakening Pound due to Brexit fears.
GBP/USD mas moved strongly higher on a combination of a more optimistic-than-expected assessment of the economy by the Bank of England (BOE) and a less optimistic assessment by the Federal Reserve (Fed).
US commercial banks are becoming increasingly confident when it comes to lending and analysts at Morgan Stanley say this should keep the US Dollar 'soft for now'.
The Pound bounced back against the Dollar on Wednesday after reports that Nicola Sturgeon could decide to drop her plan to automatically remain with the EU if Scotland voted to leave the UK.
Markets may have interpreted Scottish developments only as “a slow-moving drag for the Pound”.
A major obstacle to further downside is also the S2 monthly pivot at 1.2118, and this would have to be breached for us to have confidence of the bear trend extending.
A positive rise in exports compared to imports helped push Sterling higher on Friday morning and enabled it to shrug off exceptionally poor Manufacturing data.
The US Dollar weakened in the aftermath of the long-awaited US labour report on Friday as salaries disappointed.
GBP/USD is moving lower as Sterling starts to unravel following the Chancellor’s budget speech on Wednesday.
The Pound rose by 0.3% against the Dollar and the Euro during the budget as investors took confidence from the Chancellor’s upbeat tone and bullish revisions to growth forecasts for the current year.
GBP/USD is in a short-term downtrend on the four-hour chart which may take it down to support at the S2 monthly pivot at 1.2120.
Pound Sterling retains a negative bias against the Dollar and the Euro with another leg lower in the currency complex being sparked on the back of the release of data which showed a further slowdown in high-street retail sales as shoppers cut spending, especially on non-essentials.
Morgan Stanley (MS) have provided their view of G10 currencies at the current juncture.
UK government bonds, also known as gilts, should start to yield more as the economy remains stable and inflation expectations build, says the chief economist at advisory service Capital Economics, Jonathan Loynes.
The Pound to Dollar exchange rate, or “Cable” as it is known amongst traders, is vastly overvalued and therefore a prime candidate for selling, says J P Morgan strategist Paul Meggyesi in a recent note seen by Pound Sterling Live.
GBP/USD lost ground last week as the Dollar rose on the increasing likelihood the Federal Reserve will raise interest rates in March thus stimulating foreign capital inflows.
A survey of managers in the construction industry revealed a more 'constructive' outlook for the sector than had previously been expected.
A leading survey of manufacturing sector purchasing managers in February showed a mild pullback in results as activity lost some momentum, however, economists do not seem concerned, retaining a broadly optimistic long-term outlook.
Assuming a conservative target expectation, it will probably at the very least reach the 1.2770 range highs, which would provide an initial target for the pair.
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