GBP/USD technical analysis ► review of the major events that will move the British Pound (Sterling), and especially pound/dollar (cable) during the week. Here is some general information. Scroll down for the latest GBP/USD outlook
GBP/USD is one of the most traded currency pairs in the world and certainly one of the oldest. The nickname “cable” originates from the fact that the exchange rate was transmitted over the telegraph cable between Great Britain and the USA.
Sterling/greenback trading is characterized by high volatility in comparison to some of its peers, where stop-loss orders are usually placed at wider margins.
Another characteristic of British pound trading is that the pair “front-runs” economic releases from the UK. We often see a strong market movement ahead of publication, either due to rumors, leaks or sheer nervousness.
The pound is a “risk” currency: when the global mood is positive, GBP tends to gain against the USD, albeit usually not at the same magnitude as commodity currencies. When doom and gloom return to markets, the pound is on the retreat.
Brexit and GBP/USD
The biggest market mover of GBP/USD is the surprising decision of voters in the United Kingdom to leave the European Union. This unprecedented move shook up not only UK politics (the resignations of David Cameron, Nigel Farage, and Jeremy Corbyn’s struggles) but also Her Majesty’s currency. Brexit has sent Pound/USD to levels last seen in 1985. Post-Brexit GBPUSD forecasts vary by timeframe. During the summer, the pair stabilized and “hugs” the 1.30 level after the Bank of England laid out its
During the summer, the pair stabilized and “hugs” the 1.30 level after the Bank of England laid out its comprehensive stimulus package. Will the support by Mark Carney push the pound back up? Or is the deteriorating situation and the risk of recession in the UK set to trigger further interest rate cuts, Quantitative Easing, and downfalls of the currency?
Latest GBP/USD weekly forecast: