These are good levels to exchange pounds into dollars according a new analysis on the GBP/USD published by a leading currency brokerage.
Forecasts from FX delivery firm AFEX warns that the slide in the British pound to dollar exchange rate (GBP/USD) is not yet over and as such any gains - as we have been seeing lately - should be capitalised on.
The predictions come during a lull in declines for the currency pair following suggestions that the now well entrenched downtrend is at extreme levels.
Sell-Off Eases, But Long-Term Downtrend Remains Intact
Lucy Lillicrap, FX risk management solutions at AFEX, has told us she is sceptical that the current strength in the pound dollar exchange rate can extend:
“Insufficient evidence exists to confirm this up-leg from 1.4950 is anything other than corrective only and even if Sterling values continue to correct or at least consolidate for several more days another foray below 1.5000 remains readable going forwards.
“Downside potential then exists to 1.4800 (a prior notable reactive low) - a break of which would allow for a move towards 1.4500, if not 1.4000, before more obvious buying interest is encountered. “In the meantime selling pressure has already emerged around 1.5350 and given additional resistance at 1.5550 recovery potential looks limited. “
Lillicrap says additional base work might conceivably improve the current GBP negative environment but otherwise broad technical indicators point to renewed GBP weakness heading into Q2 2015 at least before any sustainable recovery becomes readable again.
US Dollar Boosted by Jobs Growth
A challenging week for the US turned positive on Friday with unexpected better than forecast non-farm employment data for the fifth month in a row.
This allowed the US some much needed-relief after a torrid week which showed negative employment indicators and a worse-than-expected trade balance figure, which led to banks decreasing their 2015 US growth forecasts.
“We can expect a quiet first half of the week for the US this week until Thursday, with little data releases due before then. The G20 meetings take place on Monday and Tuesday, in which reports usually come out during the day with news that has been discussed,” says analyst Carl Hasty at Smart Currency Business.
In addition to this, we have a couple of Federal Reserve members speaking, with the spotlight on when the US might raise their Interest rates.
Hasty note that Thursday is expected to be the busiest day of the week with retails sale figures and the weekly unemployment claims data which are both expected to show improvements compared to the previous releases, followed on Friday with consumer sentiment data (a leading indicator for consumer spending in the US).
“If you are looking to buy or sell US dollars, we suggest contacting your trader now for live rates, news and currency-purchasing strategies,” says Hasty.