Fundamental view:

The British pound has taken the advantage of dollar weakness in the past week but could not take full advantage due to rising UK covid cases. Fed officials have taken a long list to the stage while repeating the same message that the rise in inflation is transitory while economy has a long way to go. Elsewhere, UK Prime Minister Boris Johnson said there is a continuing concern about the variant, and Germany announced restrictions for travelers coming from Britain.

US S&P/CS HPI Composite-20 yearly report on 25th May and US EIA Crude Oil Stocks Change on 26th May favored bearish trend whereas Britain Public Sector Net Cash Requirement on 25th May and US Michigan Current Conditions on 28th May favored bullish trend for the pair.

The major economic events deciding the movement of the pair in the next week are OPEC Meeting, BoE Governor Bailey Speech, US ISM Manufacturing PMI at Jun 01, UK Markit/CIPS Services PMI, US ADP Nonfarm Employment Change, US EIA Crude Oil Stocks Change Jun 03, Fed Chair Powell Speech and US Nonfarm Payrolls at Jun 04.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.11% lower than the previous week. Maintaining high at 1.4218 and low at 1.4091 showed a movement of 127 pips.

In the upcoming week we expect GBP/USD to show a bearish trend.  The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 1.4111 may open a clean path towards 1.4038 and may take a way down to 1.3984. Should 1.4238 prove to be unreliable resistance, the GBPUSD may raise upwards 1.4292 and 1.4365 respectively. Chart formation of bearish shark pattern in H4 chart favors prospects of a bearish trend. Bearish engulfing pattern formation escalates the expectation for a bearish trend.