Market Setup of the Day: Can the British Pound Rebound vs. the Dollar?

GBP / USD

One of the most often paired currencies in the Forex World, the US Dollar (USD) and the Great British Pound Sterling (GBP) may once again be compared. After the key interest rates of the USA increased, and the USD's value along with that, there may be some potential for the GBP to regain its lost value against the USD. The GBP has been stronger over the past six weeks, recording its best month in eight years in November and threatening to find its way back towards US $1.30 for the first time since early September.

---

Free eBook Helps You Master Candlesticks
This free, instantly-downloadable eBook will get you on the path to knowing candlesticks inside and out, including recognize a critical shift may affect your current trades. 
Click here for your free copy

---

The USD's gains of late, have recorded a level very close to a 14-year high against the European euro (EUR) and nearly a 10 1/2-month high against the Japanese yen. This took place a day after the Fed raised interest rates for the first time in a year and signaled it was quite likely to increase them three more times in 2017, up from the two increases forecast at the central bank's September meeting.

The increase of 25 basis points was widely expected by financial markets, and was already factored into the market. The signal that rates are likely to rise at a faster-than-expected pace surprised many investors and continued to fuel gains for the USD.

The GBP has been able to regain some of its value and may continue to regain value as Brexit and banks administer their new policies. We will be monitoring this pair to see when the current trend reverses and the potential for the GBP to regain against the USD presents itself.