GBP/USD Weekly Forecast – 14 December – 18 December
Despite dovish BoE comments regarding future rate hike, Sterling after initial decline, managed to rebound in the course of the last week, finding area around 1.4950 level to be supportive enough and by the end of the week pair managed to break even above 1.52 handle. As for next week we would pay attention to UK CPI and job figures, but the focus will of course be on Fed.
If we see rate hike it is likely that USD will gain some strength so we believe that Sterling in that scenario could easily even broke below recent lows at 1.49 handle. On the other side if Fed keeps interest rates unchanged that would probably shoot Sterling all the way to 1.54 and 1.55 handle in extension. Initially in the week pair will probably struggle to break higher towards 1.53 area. In long-term trends, if we see break above 1.53 handle after the Fed we would be more than willing to start buying the pair. At the moment selling is not an option as long as area around 1.49 handle offers some amount of support.
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