GBP/USD Price Forecast – Pound Manages to Hold On

The pound has managed to escape from the direct impact of the strength of the dollar and the fall in the euro which have been the 2 important points that have been dominating the market headlines over the last week or so. The dollar has received a boost from the rate hike that has been initiated by the Fed and also by the positive outlook that the Fed has about the economy.

GBPUSD Choppy

This kind of hawkish tone has thrown open the doors for the dollar to gain in strength and also for the dollar bulls to look ahead to some strong times as the expectations for 2 more rate hikes during the rest of the year begins to grow. The Fed has basically signalled for the same and it remains to be seen whether they would actually put this into motion in due course of time as the weeks roll by. We have seen that the rate hike as such as had minimum impact on the markets and on the pound, especially.

For the UK, things have been progressing in a smooth manner as the Brexit process begins to enter into an advanced stage and so far, there have not been any signs of any danger to the process as yet. So, the pound has been able to hold on to its regions of support despite the strength of the dollar and the happenings around the Eurozone where the ECB decision to prolong the QE has weakened the euro. None of this has directly impacted the pound which continues to trade near the 1.32 region.

With some strong buying in this region and also in the region around 1.30, if and when it gets there, the bulls seem to be fairly in control and it is likely to remain so for the short term as well. For the rest of the day, there does not seem to be any major fundamentals or economic data to affect the moves as yet and so we can fairly say that the consolidation and ranging would continue for the day.