GBP/USD Price Forecast – Pound Gets a Fillip

The GBPUSD pair had got its dose of bullishness and though this has helped the pair to push through 1.32 in due course of time, it is unlikely that the pair would be able to move too far ahead at this point of time. We can safely expect some consolidation and correction as long as the fundamentals and the economic data do not rock the boat as yet.

GBPUSD Through 1.32

Like the rest of the currencies in the market, the pound has also been hit hard by the strength of the dollar and also by the confusion and the uncertainty brought in by the various trade wars that are happening and that only adds to the confusion. But what has been helping the pound to fare relatively better than the other currencies, especially the euro, is the fact that the economy and the domestic politics in the UK seem to be fairly stable at this point of time and this has helped to add some strength to the pound.

The incoming data from the UK, including the construction PMI that came in yesterday, has been quite strong and this has lent support to the pound. The Brexit process also has been going on smoothly as expected and all of this has shown that the rest of the global troubles, including the trade wars, seem to be having much less of an impact on the UK economy than what was initially expected. That is why we are seeing the region around 1.30 acting as strong support and helping the pound to stay well bid. We expect this region to hold for the short term though the dollar would continue to gain in strength.

Looking ahead to the rest of the day, we have the Services PMI data from the UK a bit later in the day and this is likely to have an impact on the pound. But whatever the impact might be, it is likely to be only temporary as we believe that it is only a matter of time before the dollar strength returns and the downtrend resumes.