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GBP/USD Forecast 16 Mar 2016

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GBP/USD Forecast 16 Mar 2016
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The British pound got new pressure after Telegraph published results of the poll on Brexit

Yesterday, the US dollar strengthened against the British pound. Data on retail sales were in line with the forecast but were revised down in January, indicating the weakness of the GDP in the 1st quarter.

The fears of UK exit from the EU resumed, as the newspaper Telegraph reported that, according to polls, about 52% are willing to vote to leave the European Union. As a result, the pair GBP/USD finished trading near 1.4150.

Today the Fed meeting will be held. The changes are not expected, but investors are waiting for aggressive comments of Janet Yellen. The market considers the 50% probability of a rate hike only in July (53%). In a case of aggressive comments, expectations are much closer.

The main intrigue of today's meeting is the change of the discount rate on which banks loan directly from the Fed. Today the US is also to present data on the inflation rate. The UK will present data on the unemployment rate and claimant count change.

How to trade

Today, if we get the aggressive comments of Janet Yellen and increasing fears of Brexit, we expect the continuation of the decrease in the pair GBP/USD below 1.40. We would buy put option if the price decreases below 1.4075.

Expiry: 21:00 GMT

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.

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