GBP/USD Daily Price Forecast – GBP/USD Back Above 1.30 Handle But Strong USD Prevents Further Upside Move

The GBP/USD pair struggled for a firm direction and seesawed between tepid gains/minor losses, within a broader trading range through the early European session. A positive opening across European equity markets, pointing to improving risk sentiment prompted some softening in the US Dollar and helped the pair to rebound around 45-50 pips from an intraday low level of 1.2993. As of writing this article, the pair is trading at 1.3024 up 0.06% on the day.  While the pair is relatively range bound, the pair is expected to see some amount of volatility in near term as BOE interest rate updates and US inflation data are scheduled to release tomorrow. In today’s market the intra-day lows hit by the pair could be viewed as influence of investors concerns over global trade tensions which supported safe-haven demand for the greenback.

USD Prevents Further Upside Moves Backed By Strength Gained From Trade War Woes

Investors remained focused on the U.S.- China trade dispute amid fears that an escalation could be imminent. China will ask the World Trade Organization next week for permission to impose sanctions on the U.S. for Washington’s non-compliance with a ruling in a dispute over U.S. dumping duties. This comes after President Donald Trump announced Friday that there could more trade tariffs against Beijing totaling $267 billion. As dollar continues to gain strength in global market over trade war woes major currencies traded across globe have hit a road block with dollar’s strength limiting any chance of upside move during today’s market hours.The uptick wasn’t backed by any fresh news/development and thus, lacked any strong follow-through momentum/conviction.

Moreover, a modest USD slide turned out to be short-lived and was quickly bought into, which further collaborated towards keeping a lid on any meaningful up-move. Despite a good two-way move, the pair struggled for a firm direction as investors now seemed to refrain from placing any aggressive bets ahead of the latest BoE monetary policy update, due to be announced on Thursday. In the meantime, today’s release of the US PPI print might help traders grab some short-term trading opportunities later during the early North-American session. Immediate resistance is pegged near 1.3060-65 region, above which the pair is likely to aim towards reclaiming the 1.3100 handle. On the flip side, any meaningful slide below the key 1.30 psychological mark is likely to find strong support near the 1.2965-60 region.