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GBP/USD Forecast 23 Mar 2016

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GBP/USD Forecast 23 Mar 2016
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GBP/USD got pressure on a back of the weak data

Yesterday the pair GBP/USD showed a significant decrease to around 1.42. This decrease was caused not only by the fears that have emerged after the explosions in Brussels, but also after the publication of the British data.

Inflation was weaker than expected, confirming the prospects for long ultrasoft Bank of England's policy. This makes some doubts about rate hike in the near future.

Yesterday, Moody's stated that the UK consequences of the Brexit are not too great. This seriously contradicts all that we heard earlier from the British authorities, who claimed that the economy loses billions of pounds and millions of jobs as a result of Brexit.

Moody's noted that uncertainty about the voting, it is the main factor of pressure right now. Such news may be positive in the medium term. The current level can be a good starting point for buying CALL options with long expiry.

How to trade

We expect downward movement after the breakdown of 1.4168. Short-term upward movement is possible in the range 1.4272 - 1.4353. We would buy PUT options if the pair GBP/USD falls below 1.4168.

Asset: GBP/USD
Direction: PUT
Target price: 1.4168
Close price: 1.4115
Expiry time: 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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