Weekly Forecast

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GBP/USD Weekly Forecast (22nd February 2021 – 26th February 2021)

Feb 20, 2021 05:30

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Fundamental view:

The British pound has rallied significantly to take out the 1.40 level. Reaching this level is a mix of British of upbeat UK corona virus statistics and a twist lower in the dollar amid yield-moving stimulus speculation. The British variant is the reason or excuse of several countries struggling to cope with COVID-19. In the UK, where this strain known as the Kent variant originated, victory seems to be at hand. Recent coronavirus infections, hospitalizations, and deaths are all falling sharply.

US NY Fed Empire State Manufacturing on 16th Feb and US TIC Net Long-Term Transactions on 17th Feb favored bearish trend for the pair whereas Britain HPI yearly report on 17th Feb and  US Housing Starts on 18th Feb favored bullish trend for the pair.

The major economic events deciding the movement of the pair in the next week are UK Claimant Count Change, Fed Chair Powell Testimony, US CB Consumer Confidence Index at Feb 23, BoE Governor Bailey Speech, Fed Chair Powell Testimony at Feb 24, US GDP quarterly report, US Core Durable Goods Orders monthly report, and US Initial Jobless Claims at Feb 25.

 GBP/USD Weekly outlook:

Technical View:

Last week’s high was 1.21% higher than the previous week. Maintaining high at 1.4036 and low at 1.3830 showed a movement of 206 pips.

In the upcoming week we expect GBP/USD to show a bullish trend.  The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 1.4081 may open a clean path towards 1.4162 and may take a way up to 1.4288. Should 1.3875 prove to be unreliable support, the GBPUSD may sink downwards 1.3749 and 1.3668 respectively. Chart formation of descending triangle breakout upside in H4 chart favors prospects of a bullish trend. Three white soldiers pattern formation escalates the expectation for a bullish trend.

Preference
Buy: 1.3996 target at 1.4161 and stop loss at 1.3870

 

Alternate Scenario
Sell: 1.3870 target at 1.3669 and stop loss at 1.3996
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