Pound is in no hurry to recover

European currencies are making new attempts to recover within the bearish trend, but the momentum remains limited. Euro slightly moved away from the fresh lows of the year under the 1.17 mark, but on approach to the 100-hour moving average consolidated slightly above the opening level.
The pound received a good push to accelerate the bullish pulse, but could not use it fully. Retail sales in Britain were much better than forecasts in April. The indicator in monthly terms jumped 1.6% after a decrease of 1.1% against expectations of a recovery of 0.7%. Sales excluding fuel also recovered, showing an increase of 1.3% after a 0.5% decrease in volumes in March.
GBP/USD tried to grow in response to the release, but just like the euro, it ran into a 100-hour moving average in the 1.3420 area and fell back under the psychological mark. The pair must close above 1.34 to confirm the weakening of short-term pressure.
The reaction of quotations speaks not only of the restraint of buyers in the market, where the dollar continues to trade within the uptrend, but also that the restoration of retail sales did not affect the expectations of players regarding the future policy of the Bank of England. In addition, the April data players regard as obsolete - the response to fresh releases promises to be more lively.
In the short term, the pound is unlikely to develop the momentum of growth and is likely to continue to attract sales on growth attempts. The nearest important resistance is in the area of ​​1.3460.

The pound may fall to 1.20

The Big News of the Day - Early parliamentary elections in the UK. Experts say the big election victim may be the pound. It may fall to 1.20, a level unseen since January, if the election does not elicit a clear winner.
It can be summed up that Theresa May's idea of ​​calling early elections even in the light of potential loss is not determined by investors as the better way for the pound.
Analysts also comment that the prospects for "tough EU exit talks" could boost the downward pressure on the pound in the medium term.
It has now become clear that May's party leads in the election but will not be able to win a stable majority.
In the absence of a clear winner, uncertainty is expected to increase significantly. For this scenario, expert estimates range in the widest range from the lowest expectations for 1.20 to 1.2350 average.

JP Morgan: We must be careful with the pound as the bulls remain in control of the situation

The break of support around 1.2430/20 last week has a negative impact on the dynamics of the British currency, and now the pair found support near 1.2360, as analysts of JP Morgan advised to be careful.
In the bank warned that a break below 1.2316/00 will signal the return of the couple to a model of consolidation and the support moves to 1.2229 then the focus will be on 1.1988.
So far, the banking scenario is consolidation of the pair in the short term and new test of the resistance above 1.2631. The ability of the pound to overcome the last resistance is a sign of support for the Bulls, who hope for formation of bottom, as a way opens to test 1.2839 and then 1.3187.

Commerzbank maintains a bearish view on pounds

Commerzbank analysts believe that the short term outlook for the pound remains negative.
Last week, the pound failed to close above the short term resistance at 1.2579/81 (maximum of February 9), the negative forecast of analysts remains.
The pound is still not closed below 55- and 100-day moving average, but analysts believe that it will happen this week. Elliott waves are positive, but the market is facing 1.2640 and 1.2660. Below 1.2347 (minimum of February), attention will focus on the recent minimum of 1.2110. It is considered the last defense of 1.1988 - bottom-January.
Key short-term resistance is at 1.2640. Only break above 1.2707 most of February will enable expect further strengthening to the maximum since December - 1.2777. Between this level and 1.2836 lie several Fibonacci corrections and greater resistance and analysts suspect that the bulls will not go further.

GBP/USD: Expecting northern correction

To give a forecast on the behavior of GBP/USD in the upcoming week is quite difficult. And, despite the fact that more than 90% of the indicators point to the south, only 40% of experts support them. Most of them, along with graphic analysis on H4, took the side of the bulls, believing that the pair has already reached the local bottom and now it is waiting for the rebound to rise at least to the resistance zone 1.2250-1.2300. The next resistance is 1.2385. A support is seen at the level of 1.1985. Of the important events for this pair, the following should be noted: the possibility of starting the UK exit procedure on Tuesday, March 14, and the decision of the Bank of England on the interest rate on Thursday, March 16, which is likely to remain unchanged at 0.25%.

Commerzbank recommends caution regarding the pound

Analysts at Commerzbank remain wary of pound, adding that the behaviour of the currency can be described as somewhere between neutral and negative.
GBP/USD broke through 55-day moving average, but could not close below support, which is located at 1.2429. Price movements can be interpreted as a slight twist, so attention is now fully justified. Last week, the market bounced off the top of the channel at 1.2702. Closing below 55-day moving average, opens the way for a fall to 1.2253, a minimum of 18 January.
The forecast of analysts from the bank remains neutral to negative. They suspect that prices will have to break through 1.2250 to relieve the current upward pressure and cause testing of minimums at 1.1988/80.

Goldman advised to use strengthening of the pound for sales

The pound has clearly demonstrated this week that is among the major currencies, analysts say. First, published on Saturday and Sunday article in the Sunday Times, which refer to confidential sources, said that British Prime Minister Theresa May in a statement categorically said that the country is out of the EU single market.
As a result of an increased risk of difficult Brexit, the pound fell. In reality, however, in her statement on Tuesday Theresa May said she wanted a soft option, stating that the procedure for the final vote for Brexit will be voted by parliament, and lack of access to the EU single market for goods and services will be replaced by new contract, the analyst added.

Recommendations of UOB for the pound

The pound remains bearish with the potential for a possible test of 1.20, according to currency strategists at UOB. They say that the pound has been pushed down to the support at 1.2100 and reached 1.2038, having previously turned to growth, to test the strong resistance at 1.2250 (maximum 1.2273), analysts say.
The upward movement seems to be underway and while testing again 1.2270/75 will not cause surprise, the next major resistance at 1.2300 is likely to hold the attack of bulls, analysts say.
Earlier, the pound has broken through the strong support at 1.2085/90 (minimum 1.2038) but the downward movement was quickly replaced by recovery. While the level of 1.2290 remains intact, another wave down to 1.2000 can not be excluded, they added. Those who have short positions should consider partial profit taking near 1.2005/10, write experts.

The attractiveness of the British currency may rise

The dollar took a break again, going to the correction mode after Wednesday's rally. European currencies are trying to recover due to the increased interest in risk appetite following Wednesday's decision of OPEC to reduce production volumes, which triggered a 10% rally of oil prices.
Especially actively adjusted pair GBP/USD, which had reached a 3-week highs near 1.2660. After the breakdown of the upward movement of 1.26 quotes accelerated, and now the pound is trying to strengthen its position on the psychological level. The key growth driver for the British currency were the optimistic statements of the Minister of Brexit, which tried to weaken the market fears of a "hard Brexit". Players were particularly pleased with the comment that Britain can maintain access to the European single market after leaving EU. This is directly beneficial for the sterling as the British currency will return the attractiveness, shattered after the June referendum.
If we compare the EUR and the GBP, the position of pound look at this stage is much more stable. Status of the British economy, in spite of the "divorce" with the EU, so far eliminates the need for additional stimulus, and the negotiations themselves on an output from the block may last for quite a long period. The ECB, from the other hand, may be forced to extend the program of buying assets, especially in light of the increased political risk in the region.
However, the potential for further strengthening of GBP/USD looks limited due to the fundamental strength of the dollar. Today the US will publish key employment report, which is expected to increase jobs in the area of ​​170-180 (in my opinion higher than 200) thousand. If expectations are met, players will resume buying USD in anticipation of Fed rate increase at the next meeting.

Nomura expects growth of the pound

The reduction of short positions and the idea of ​​strengthening of the inflation caused rally of the pound. GBP regained the status of a reserve currency, but it does not reflect the hope that the UK can receive preferences in negotiations with the EU, analysts say. The pound should overtake other currencies in the short term as market attention is not drawn to negotiations for Brexit next year, they added.
Bank analysts expect the GBP/USD to reach 1.30 while EUR/GBP to fall to 0.84, while sales do not reach the threshold and did not give any other signal. The Supreme Court may decide that the reference to Article 50 of the Lisbon Treaty to initiate the procedure for leaving the country from the EU, requires the approval of parliament. But it is not excluded the Parliament to vote earlier and that they do not need a court decision, according to analysts.

The markets have calmed down and the dollar stopped growing

The dollar has stopped the rise and traded steadily against other currencies in quiet trading on Friday as investors have recovered from the shocking results of the voting in the United States, and became even optimistic considering the choice of Americans to the country's economy.
The EUR/USD fell by 0.30% to 1.0852. On Wednesday, the pair jumped to 1.1298, the highest level since September 8, before returning to 1.0902.
The dollar was supported as investors revised their initial expectations for Trump presidency. Market participants expect an increase in costs and increase in inflation during the administration of Trump.
The dollar showed an increase after on Thursday the US Department of Labor said the number of initial applications for unemployment benefits for the week ended November 5 fell by 11000 to 254000. Analysts had expected a decline in the number of initial applications by 5000 to 260,000 last week.
The Mexican peso continues to fall, MXN/USD pair fell by 1.44% to a fresh record low at 0.0479.
At a press conference on Wednesday the governor of the Mexican central bank said that the institution is watching the market volatility, but refrain from any national currency stabilization measures.
GBP/USD pair rose by 0.85% to 1.2595, the highest level since 6 October.
The pound was supported, as some British politicians have declared that they intend to vote against the negotiations on Brexit, after a court stated that the UK government must obtain parliamentary approval to initiate the process of exit from the EU.
Pair USD/JPY fell by 0.49% to 106.66, holding near a three-month high on Thursday at 106.94.
Australian and New Zealand dollars fell, AUD/USD pair fell by 0.33% to 0.7541 and the pair NZD/USD fell by 0.29% to 0.7106.
Pair USD/CAD rose by 0.27% to 1.3536, holding near a seven-month high at 1.3525.
USD index, which shows the relationship of the US dollar to a basket of major currencies, was steady at 98.84, remaining at the 2.5-week high on Thursday at 99.08.

BBH forecast that EUR/USD will go to 0.83 dollars, while GBP/USD - to 1.00 dollar or even lower

EUR/USD fell below the important support of 1.1040 dollars, this level has now become resistance.
The bank remains bearish long-term to the couple as according to them a further reduction could send the GBP/USD to parity or even below. This month, the single currency fell by 2.4 percent against the US dollar and increased by 2.8% against the British pound, and October can be the fifth consecutive month of growth of EUR/GBP (+ 12% since the beginning of Brexit). The length of this uptrend is comparable only to the period August 2012 - February 2013, when the couple grew seven consecutive months.
The recovery of EUR/USD from the declines in January was interrupted in the middle of last week with a break below 1.1040 dollars and now the pair descended to levels of late July, trading not far from achieved immediately after the British referendum drop around 1.0915 dollars, say analysts.
A break below this level could send the pair to test the support at 1.0800-20 dollars, and if EUR/GBP rise to 0.90 pounds, analysts expect GBP/USD to return to 1.20 dollars.
In the long term, analysts of the bank are in anticipation of reducing the EUR/USD to historic lows around 0.83 dollars, and the GBP/USD to fall below 1.00 dollar.

Scotiabank: GBP/USD entered the dead zone and does not give any signals

According to bank's analysts the short-term technical picture for the GBP/USD looks neutral and the pair seems to have entered a dead zone and does not give any signals.
However, it seems that correction up is exhausted and the Bank remain long-term bearish.
Repeated testing this week on the support of 1.2255-60 dollars seems a key area that could determine the fate of the dynamics of the GBP/USD in near future, they added.
If the pair hold above this level, it is entirely possible that it would test the area of 1.23 dollars. Otherwise, it is expected the pair to fall below 1.2250 dollars, which make the picture bearish.

Morgan Stanley: GBP/USD could rise to 1.2650

According to analysts' forecasts of the bank the British currency should begin to recover from current levels, GBP/USD has all chances to go up to 1.2650 dollars amid rumors that the government is studying alternative methods for Brexit.
According to the Financial Times UK can continue to pay billions to save the reach of the City to markets of united Europe and Theresa Mae assures that the export competitiveness of automakers in the country will not suffer as a result of negotiations for Brexit.
Investors take extremely aggressive short positions in pounds, making the growth of this currency in the short term unlikely, analysts said. In addition, the assumption on the likely impact of the pound on the policy of Bank of England may limit the potential for a further reduction of British currency in the short term, analysts conclude.

It doesn't worth selling pounds on raising

Last week, the focus was on the British pound. It became under pressure after the announcement of the British Prime Minister Theresa on May Oct. 2 about the beginning of Brexit in April 2017. At the same time the UK has no plans to put the interests of the financial sector at the heart of the negotiations with Brussels. The statement by the President of France on the hard approach to the UK from the European Union exit added even more negativism. Even the status of the British pound as the world's reserve currency may be questioned.
Most notable was the flash crash of the pound on the night from Thursday to Friday. Within two minutes the pair GBP/USD fell by 6% to 1.1841, which is a minimum for thirty years. On some trading sections the British pound fell to $ 1.1378. Soon after that, the decline was partly purchased. There are several versions of what happened. Most likely, this was due to the actions of hedge funds or trading robots.
Currently, there are no buyers of the pound. It is necessary to recognize and understand that fact. The pair is best to be left in peace, if the short positions are already closed. If the sale is still open, you can keep them, since it is likely the reduce to be repeated to this year lows.

GBP/USD up on positive UK data

On Friday, the pound was up against the US dollar after the economic growth of the United Kingdom in the second quarter were revised higher than expected, and an encouraging report on the UK balance of payments surplus tempered concerns about the potential adverse effects до Brexit.
In the European morning trade the pair reached 1.2986, the session high, rising by 0.17%, GBP/USD  subsequently consolidated at 1.2976.
The pair is likely to receive support at 1.2912, the low of September 23 and at one-month low and resistance at 1.3125, the high of September 22.
UK Office for National Statistics said that GDP grew by 0.7% in the second quarter compared with the previous estimate of 0.6%, although the projected growth was 0.6%.
In annual terms, GDP grew by 2.1% in the second quarter compared with the previous estimate of 1.9%, but lower than the expected 2.2%.
A separate report showed that the deficit of the current account balance of payments increased during the last quarter only to 28.7 billion pounds from 27.0 billion pounds in the first quarter, the figure was revised from a previous estimate of growth to 32.6 billion pounds. Analysts had expected the deficit in the second quarter to increase to 30.5 billion pounds.

Forex forecast for GBP/USD for September 19 - 23

As expected, the behavior of the pair GBP/USD last week was determined by the large amount of news from the UK. At the same time the most of analysts with a graphical analysis on the D1 predicted for the pair bearish trend in an effort to stay within the boundaries of the summer side channel. What happened - as a result of a sharp fall, the pair even broke through the central channel of the line and reached a level of 1.3000.
 Assessing the prospects for the GBP/USD, most of the indicators and technical analysis on the D1 insist on continuation of falling of the pair to the lower limit of three-months side channel - 1.2850. As for the experts, their opinions were divided into three almost equal - 35% for the fall, 30% of growth and 35% of the lateral trend. The common in their predictions is only that the pair will continue to stay in the corridor in the range 1.2850 - 1.3450.

How the employment report will affect the dollar?

In anticipation of today's release of the report on employment in the non-farm sector of the US, investors have started to fix profit on their long positions on the dollar. The release from positions has been associated with a weak index of manufacturing activity from the ISM, but today will be a tense day, so some traders also decided to reduce their dollar assets. Officials from the Federal Reserve made it clear, that the decision about raising interest rates in September will largely depend on today's labor market report. If the increase in the number of employees exceeds 200 thousand and the unemployment rate will remain unchanged or fall, expectations about rate hikes in the next month will increase, causing a full-scale dollar strenghtening, wich would bring USD/JPY at the highest level for the month. If the figures are quite high, USD/JPY could even reach 105. However, if the report disappoint, the dollar can meet a nasty correction after rising last month. Stronger than all the dollar would fall to the British pound and the New Zealand dollar - the two currencies, which showed particularly good results in the eve the publication of the report.

Euro/dollar slipped below 1.12

At the trading session in Europe, the US dollar is trading in the positive zone. The euro/dollar is losing 23 points compared to Friday's close at 1.1193. GBP/USD fell 60 pips to 1.3068. UK markets are closed for a bank holiday in the country, which leads the cable to low volumes and high volatility.
The US dollar continues to get support from Friday's speech by Janet Yellen and the next increase in US interest rates. The British pound fall against the dollar is stronger than the euro, as the cross-pair EUR/GBP is trading higher.
In the evening US are about to publish reports of expenditures on personal consumption and the index of personal income and costs. These can have an impact on the dynamics of the dollar, if they are significantly higher/lower than the predicted values. If they match with the expectations, there will be no reaction to the news.

Westpac recommends selling of pounds around $1.32 to $1.28 and $1.25

Westpac strategists recommend selling GBP at 1.32. They note, that there is a risk a risk of profiting from short positions. However, they say, that the correction of the GBP will likely be short term as the Bank of England took a very flexible position. Regular auctions should emphasize the intention of the Bank of England to cut rates again, which will support the bearish pressure on GBP, analysts say.
The level of economic activity and the housing market in August, which will be published at the end of the month, will likely cause more interest, than the GDP data for the second quarter, as signs of deterioration of the data can trigger further action by the bank of England, say analysts.
The closure of short positions on GBP/USD should allow sales to 1.3200, with the initial target 1.2800, as the more distant target is the psychological 1.2500 level, analysts conclude.