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GBP/USD Forecast 18 Mar 2016

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GBP/USD decreases after strong growth yesterday

Yesterday, the Bank of England meeting minutes were unexpectedly restrained, although investors have been waiting softer comments after the ECB's performance. The protocol emphasized that the most likely rate hike will be the next step of the Bank of England.

The US balance of payments for the 4th quarter is really disappointing. The negative balance for the previous period (Q3) was revised from -125 billion to -130 billion, for the 4th quarter amounted to -125 billion vs. -117 billion.

As we predicted yesterday, when the big investors will complete the redemption, we can see the strengthening of the US dollar. Speculative phase lasts an average of 3-5 days. We expect that the speculative phase ends, and therefore, we expect the consolidation of the pair GBP/USD in the range of 1,4510 - 1,4575.

How to trade

The level 1.4343 is a support level for GBP/USD. It is necessary for the pair to trade above it to continue growing. We expect some rollback of the pair to the level of 1.4430 during the day and we would buy CALL options when the price reaches that level.

Asset: GBP/USD
Direction: Call
Target price: 1.4430
Close price: 1.4461
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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