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GBP/USD Forecast 1 August 2016

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GBP/USD Forecast 1 August 2016
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On Friday, the US dollar had the prerequisites to strengthen but could not do it.

The US GDP for the 2nd quarter was significantly worse than prognosis. The indicator was 1.2% -against the forecast of 1.8% vs. -2.6%.

Now, the waiting of the Fed's monetary policy change will be the main prerequisite for the strengthening of the US dollar.

However, the FOMC has virtually no arguments to keep sentiment positive. After the GDP data showed a drop, the market reacted by lowering the probability of a December increase from 36.8% to 30.9%. This means that investors do not believe even in the December increase.

However, the dollar may strengthen against the Cable and the Aussie which expect to the rate cut this week. If this does not happen, then the dollar will continue weakening.

Today the UK is to publish data on Manufacturing PMI, which is expected unchanged 49.1. The United States will present data on the ISM Manufacturing PMI. The forecast is 53.0 against the previous 53.2.

As a result, we expect the pair GBP/USD at the 1.3330 area.

How to trade

We would buy call options if the pair rises above 1.3270

Asset: GBP/USD
Direction: Call
Target price: 1.3270
Expiry time: 20:00

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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