Introduction
The GBP/USD currency pair has been on a strong upward trajectory in recent weeks, gaining over 3% since the start of January. The pound is now looking to extend its gains in the coming days, with analysts predicting a move toward the 1.24 resistance level. In this article, we will explore the factors driving the GBP/USD forecast, provide technical analysis, and outline potential trading opportunities.
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Factors Driving GBP/USD Forecast
UK Economic Outlook
The UK economy is performing relatively well compared to other major economies. The Bank of England (BoE) has raised interest rates several times in recent months to combat inflation, which has helped to boost the value of the pound. The UK’s GDP is expected to grow by around 4% in 2023, which is higher than the growth forecasts for the Eurozone and the United States.
US Economic Outlook
The US economy is also performing well, but there are signs that it may be slowing down. The Federal Reserve (Fed) has also raised interest rates several times in recent months, but it is now expected to slow down the pace of rate hikes. The US GDP is expected to grow by around 2% in 2023, which is lower than the growth forecasts for the UK.
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Brexit and Political Developments
The Brexit negotiations are ongoing, and there is still uncertainty about the future relationship between the UK and the EU. However, the recent removal of the Northern Ireland Protocol from the Brexit deal has helped to reduce some of the uncertainty and has boosted the value of the pound. The outcome of the Brexit negotiations will continue to be a key driver of the GBP/USD forecast.
Technical Analysis
From a technical perspective, the GBP/USD currency pair has been trading within a rising channel since the start of January. The pound is currently testing the upper boundary of the channel at 1.2350, and a breakout above this level could lead to further gains. The next major resistance level is 1.2400, which is the 50% Fibonacci retracement level of the downtrend from March 2022 to September 2022.
Trading Opportunities
Based on the fundamental and technical analysis, there are several potential trading opportunities for the GBP/USD currency pair:
- Long Trade: If the pound breaks above the 1.2350 resistance level, a long trade could be considered with a target of 1.2400.
- Short Trade: If the pound fails to break above the 1.2350 resistance level, a short trade could be considered with a target of 1.2200.
Gbp Usd Daily Forex Forecast
Conclusion
The GBP/USD currency pair is looking to extend its gains in the coming days, with analysts predicting a move toward the 1.24 resistance level. The UK economy is performing relatively well, while the US economy is showing signs of slowing down. The Brexit negotiations are ongoing, but the recent removal of the Northern Ireland Protocol from the deal has helped to reduce some of the uncertainty and has boosted the value of the pound. From a technical perspective, the pound is trading within a rising channel and is currently testing the upper boundary of the channel at 1.2350. A breakout above this level could lead to further gains. There are several potential trading opportunities for the GBP/USD currency pair, but traders should be aware of the risks involved before entering into any trades.
