GBP/USD Forecast

  The GBP/USD has found strength at this point, showing the 1.60 as a strong support area yet again. The pair continues to grind northward, and should keep doing so. The pair seems to be a snail’s pace market, but keeps making higher highs, and keeps this flat level low. Strength is to be expected, albeit very slowly. A break of 1.60 is bearish, but seems to be very difficult at this juncture.

Coming Up Today (All times GMT) 9:30 GBP Services PMI 12:45 EUR Interest Rates 13:30 EUR ECB Press Conference 13:30 USD Unemployment Claims 15:00 USD ISM Non-Manufacturing PMI 18:00 USD Fed Chairman Bernanke Speaks US Dollar has been mostly in sideways against the other instruments in the forex market the last 24 hours, the Japanese Yen has been trading between the 81.30 support level and the 81.81 resistance level. The Swiss Franc found support yesterday morning at 0.9328 and did not move lower until now and is traded below the 0.9480 resistance level. Today focus is mainly on the Jobless claims and on Bernanke’s speech. EURUSD Euro against the greenback is trading between the 1.3860 resistance and the 1.3756 support. The pair is correcting after it has been rallying earlier this week and seems like market participants are not willing to choose a direction before the announcement of the interest rates and the Jean-Claude Trichet’s press conference. There is speculation that Trichet’s will take a hawkish stance at the...

For sterling versus the dollar we can see a possible harmonic pattern, which started since the recorded trough at 1.3501in December 2009. The BC corrected 78.6% of AB which is one of the infamous levels for the harmonic pattern. According to the harmonic ideals and specifically AB=CD, the 78.6% correction meets 127% correction to be the potential reversal zones. In the aforementioned suggested pattern for the pair, we can see that the CD leg might correct 127% of BC leg which is inline with the ideal AB=CD pattern. Therefore, the pair is targeting areas around 1.7785 which might be the first Pivotal Reversal Zone (PRZ), signaling the bullishness into 2011.  The harmonic pattern has not been confirmed yet and to attain that it requires stability above the psychological and technical levels at 1.6000-85 followed by a clear breach and stability above 1.6300, which are the top levels shown above. From below, the scenario requires stability above 1.4900 with weekly closing which keeps...

  The GBP/USD pair had a bullish day today, as the market retested the 1.6350 level, a major area of resistance. At the end of the day, we formed a shooting star. Because of this, it looks as if the pair could pullback from this level. Noting that the pair has a history up here, that wouldn’t be too surprising. A pullback should present buying opportunities as the strength is still with the bulls overall.

  The GBP/USD pair had a bullish day today, as the market retested the 1.6350 level, a major area of resistance. At the end of the day, we formed a shooting star. Because of this, it looks as if the pair could pullback from this level. Noting that the pair has a history up here, that wouldn’t be too surprising. A pullback should present buying opportunities as the strength is still with the bulls overall.