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GBP/USD Forecast 26 May 2016

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GBP/USD Forecast 26 May 2016
5/5 of 3 ratings

Yesterday the pair GBP/USD managed to add 95 points, but to the end of the trades, it declined and finally added only 62 points.

The US Goods Trade Balance was -57.5 billion vs. -60.1 billion. In March, the house price index rose by 0.7% vs. the forecast of 0.4%. The Services CPI was 51.2 points against the forecast of 53.1 in May.

Today the UK will release the second estimate of GDP for the 1st quarter, the forecast is unchanged 0.4%. The BBA mortgage approvals are expected to decrease to 44.8K from 45.1K in March.

The United States will present data on Core Durable Goods Orders, which are expected to increase by 0.3% compared to -0.2% in March. The weekly jobless claims are expected to decrease from 278K to 275K. The pending home sales are expected to increase by 0.6% -0.7% in April.

Also, two representatives of the Federal Reserve - James Bullard and Jerome Powell will have speech. Bullard has previously hinted that the summer rate hike is not accepted. Tomorrow we will see the 2nd estimate of GDP which can make the summer rate hike clear.

So, in the case of the UK positive GDP data, the pair GBP/USD pair may try to reach the mark of 1.48. In the case of weak data, we expect the consolidation in the area of 1.4670 and below.

How to trade

We would buy call options if the pair rises above 1.4727. The short-term downward movement is possible in the range of 1.4670 - 1.4624. We would buy put options if the pair falls below 1.4670.

Expiry time: 20:00 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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