The Brexit Driven Bullish Volatility is being paid off and the bullish bias is holding on. The question remains, whether the recently emerged bullish bias could prevail the downward momentum, as we have been observing the market pretty closely and we have seen quite a lot of attempts vanquished below 1.3150 zone. Moreover, the USD response to this GBP fresh highs has been remained quite weak and this has really helped the bullish move to continue in a short-term wedge pattern. Yet, this type of pattern often ended up with a bearish reversal, but this time, the USD weakness opens up the key to continue the push-up for GBP-USD pair.
Right now, during the time of writing this report, GBP was holding the bullish move well enough and it was trading at 1.3055, at GMT. 18.00, September 12th.
BOE rate decision on the verge, yet market still focused on Brexit
Tomorrow will bring the BoE rate decision and after the rate hike of previous month, there is very little chance of new information. However, the Brexit item headline is continuing the driving flow for GBP. Also, as there are positive headlines regarding Brexit moves, the chances of “GBP bullish pushes” are getting much higher day-by-day.
Forecast for USD-GBP
For near term forecast, we would like to watch GBP to reach well-above 1.3150 zone followed by poor consumer price index report of US economy and Brexit development. This might have been the opportunity GBP was looking for after its April-August downtrend.
The pointy ends for USD
Just a couple of days back, USD was doing so good against all of the currencies and the rate seemed to have reach the 95.5 mark. Yet, the recent US economy report is saying something else including the development of Brexit move, BoE rate decision and upcoming 26th September’s FED meeting that may well set a dovish move for USD.
Todays, US consumer price index report including and excluding the food & energy division showed lack of momentum followed by an increase in the interest rate as an attempt to hold on the inflation in the US economy.
At the moment, it might have been better to hold on to GBP in near-term. However, longer-term outlook still seems to be in the reverse direction (Yet, more bullish push-ups might have been on their way, as we have foreseen).
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Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.