GBP/USD Forecast Today 07/01: Races Into Resistance (Video)
(MENAFN- Daily Forex)
The British pound has shot straight up in the air during the trading session on Monday to break above the 1.25 level as the US dollar gave up gains pretty much everywhere. Now, having said this, I think you've got a situation where we got a little ahead of ourselves.
I think really what we're going to do is see signs of exhaustion that we can start selling in that scenario.
I am more than willing to short the GBP/USD , although I will say that I believe the British pound is second best right now if I had to rank currency, so I'm not looking for the British pound to fall apart. What I'm looking forward to is the US dollar to be stronger. Interest rates in the United States declined during the trading session following a Washington Post report suggesting that Donald Trump intended to impose tariffs broadly. This prompted a surge in bond market activity, but sentiment quickly reversed when Trump publicly denied the claims, stating, "I have no plans of doing this." The situation remains fluid, and its ultimate impact is yet to be determined. Either way, the British pound is a little oversold. I wouldn't be surprised to see another day or two of strength, but I'm willing to fade that. Keep in mind, Friday is non-farm payroll in the United States. So that obviously will have a major influence on what happens going forward.
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This is the week when everybody is starting to come back to work, so liquidity is picking up and it does cause for erratic moves like we saw earlier in the day on Monday. Despite the fact that it was impressive, for me it doesn't change anything, it just tells me to be a little bit patient so I can pick up cheap dollars later.
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