The Great Britain Pound rallied against the U.S dollar in last week’s trading session making a new high at 1.5929 before shedding off little gains on Friday’s trading session after the pair seems to be overbought.
The greenback came under pressure after the Federal Reserve lowered both its U.S. growth forecast and its interest-rate projections on Wednesday, prompting investors to push back expectations on the timing of an initial rate hike.
Fed Chair Janet Yellen said the central bank wanted to see “more decisive evidence” of sustained growth before raising rates, but acknowledged that the economy has “expanded moderately” after a weak first quarter.
GBP/USD’s break of 1.5814 resistance confirmed resumption of whole rise from 1.4565 as uptrend dominates. Further rise is expected as long as 1.5679 minor support holds. However the current situation in the pair seems to be in an over-bought scenario and we will be looking forward to buy the dips in this pair. Buying the pair from correction above the level of 1.5700 pivot with the target of 1.6187-1.6200 will be preferable. At this point, i’m slightly favoring that the rebound from 1.4565 is a correction. I’d expect strong resistance around 1.6187 to limit upside and bring reversal. On the downside, below 1.5679 minor support will turn bias neutral and bring consolidation first.
In the week ahead, euro zone ministers are to hold talks in Brussels on Monday to discuss the crisis in Greece.
The euro zone is to release data on private sector growth on Tuesday, while the week will also bring what will be closely watched reports on the U.S. factory and housing sectors, Core durable goods and Final GDP.