The British pound traded lower on Thanksgiving Day and gave up some of its gains to the US dollar. GBPUSD was not able to break through resistance at the daily open price at 1.2949 and it finished the day lower at 1.2908.
If you remember, the British pound rallied on Wednesday as YouGov’s poll results showed that UK Prime Minister and Conservative party leader, Boris Johnson, may get majority seats in the upcoming UK elections. The poll was particularly important because it was able to accurately predict the hung parliament of 2017. This then was bullish for the pound as it signifies that a Brexit plan may soon get passed in parliament.
Yesterday may have been all about profit-taking as US traders were on holiday being it was Thanksgiving Day.
As of this writing, the pound to US dollar exchange rate is hovering around the 1.2900 handle. The GfK Consumer Climate report was released earlier this morning and it printed as expected at -14. The currency pair was little changed from the release.
Earlier this week the USA Gross Domestic Product annualized came in at 2.1% beating forecasts of 1.9% in third quarter; the GDP Price Index came in at 1.7% in line with expectations. The Durable Goods Orders (ex Defense) registered at 0.1% beating forecasts of -0.3% for October. The Initial Jobless Claims in US came in at 213K below estimates of 221K in November.
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GBPUSD Outlook
Despite the fact the GBPUSD traded lower yesterday, the currency pair still looks like it may have room to move higher. The pair after the rally which started in early October from 1.22 and drove the pair up to 1.30 retreated and during November consolidates around the 1.29 mark.
The 1.2900 psychological handle coincides with the 38.2% Fibonacci retracement level when you draw from the low of November 27 to yesterday’s high. A close below yesterday’s low at 1.2898 could mean that GBPUSD will trade lower to test support at 1.2827 where it was bottomed earlier this week and last week. On the other hand, a strong bullish close above the 1.2900 handle could mean that it may soon revisit yesterday’s highs at 1.2950 to test for resistance. A break above that level will open the way for a move up to 1.30 psychological resistance.
Forex market volatility will be low today as many US investors will remain on holidays after Thanksgiving.Download our latest quarterly market outlook for our longer-term trade ideas.
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