04.03.201906:39 Forex-elemzések és áttekintések: Fundamental Analysis of GBP/USD for March 4, 2019

GBP/USD has been quite impulsive with the bullish momentum which was waning at the end of the week recently. Ahead of the BREXIT decision this month, GBP gains indicate the hawkish market sentiment which might turn strongly dovish.

British Prime Minister Theresa May is expected to set out the plan today for a 1.6 Billion Pound fund to boost economic growth in Brexit supporting communities. No matter whether the UK leaves the EU with or without a deal, the departure is expected to deliver a serious blow to the domestic economy that will eventually curb GBP gains. As some communities support BREXIT with a view of change, it is expected to have a positive impact in the long run. Though the UK government is already taking efforts, it is uncertail whether such measures are sufficient to keep the economy a bit better. This week MPC members Cunliffe and Tenreyro are going to speak about the nation's monetary policy and interest rate decision. Their remarks are expected to be quite neutral as per current circumstances.

Today Bank of England of Governor Carney is going to speak. Any positive comments and optimism in the speech could provide the required boost for the GBP buyers, so that GBP could gain further momentum.

On the USD side, the US and China are expected to finalize the trade deal this month. It means to roll back US tariffs on at least 200 Billion US Dollar worth of Chinese goods. By March 27^th 2019, the deal is going to be signed that is expected to inject certain volatility on USD gains. This week the Federal Budget Balance is going to be published which is expected to increase to 6.2B from the previous figure of -13.5B. On Friday, the US Labor Department is due to release NFP. The report is likely to show mixed readings which can lead to certain indecision in the market sentiment. Moreover, FED Chairman Jeromy Powell is going to speak on Friday about the monetary policy normalization. Today US Construction Spending report is going to be published which is expected to decrease to 0.2% from the previous value of 0.8%. Though it is expected to be bearish for USD, any positive outcome may lead to certain gains.

Meanwhile, GBP is expected to sustain its gains over USD. The pair could trade with higiher volatility throughout the week. The scenario of a delayed Brexit can lead to certain gains on the GBP side in the coming days. On the other hand, better than expected NFP may also encourage USD gains resulting in indecision and extreme volatility in the pair.

Now let us look at the technical view. The price is currently trading above 1.3200 area with an opening gap which is expected to push a bit lower before pushing higher following the previous impulsive bullish trend with a target towards 1.3500. The price has recently formed Bullish Hidden Divergence. So, the pair may extend its climb toward strong resistance at the level of 1.3500 before pushing lower.