Technical and fundamental factors to keep pushing GBP/USD higher
City Index February 27, 2015 5:26 PM
<p>Following my bullish GBP/USD prediction for February, issued here, I’m sticking with my forecast for advances in the pair due to a constructive combination of […]</p>
Following my bullish GBP/USD prediction for February, issued here, I’m sticking with my forecast for advances in the pair due to a constructive combination of technical and fundamental dynamics.
Technically, having remained above the two-week upward channel, GBP/USD eyes its next objective of $1.5575 – coinciding with the 100-day moving average for the first time in seven months, which could pave the way for way for its fourth rising week over the last five weeks.
In addition to converging momentum positivity across the daily, weekly and monthly time frames, GBP/USD is increasingly drawn towards $1.5810 – the 38% retracement of the decline from last year’s high to the January low.
Fundamentally, aside from improving UK dynamics (neutral BoE, expanding services, manufacturing and construction PMIs, improved budget balance and relative safe-haven status from Eurozone woes and Swiss negative rates) GBP/USD is boosted by Fed Chair Yellen’s reiteration for the Fed to remain patient, thereby delaying any signal for higher interest rates.
USD bulls will have to wait for the March FOMC for whether the Fed will drop its patient forward guidance, which will be largely dependent on the latest inflation figures (negative) and jobs data (requiring more positive momentum to overcome low inflation).
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