Fundamental view:

The British pound has broken down significantly during the couse of the week. The main focus shifted to the Bank of England, which puts pressure on economic optimism and the spread of the Delta covid variant. On the other hand, The Federal Reserve shocked markets by signalling two rate hikes in 2023, opposite to none at all beforehand. The bank also upgraded other forecasts such as that for inflation – with underlying prices set to hit 3% in 2021 – and hailed the rapid recovery.

US Retail Sales monthly report & US NY Fed Empire State Manufacturing Index on 15th June, Britain PPI Input monthly report and PPI Output monthly report and CPI monthly report on 16th June favored bullish trend for the pair whereas US EIA Crude Oil Stocks on 16th June and US Philadelphia Fed Employment & US Continuing Jobless Claims on 17th June favored bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are Fed Chair Powell Testimony at Jun 22, UK Markit/CIPS Manufacturing PMI, US Markit Manufacturing PMI at Jun 23, BoE Interest Rate Decision, US GDP quarterly report, US Core Durable Goods Orders, US Initial Jobless Claims at Jun 24 and US Core PCE Price Index at Jun 25.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.41% lower than the previous week. Maintaining high at 1.4132 and low at 1.3791 showed a movement of 341 pips.

In the upcoming week we expect GBP/USD to show a bearish trend.  The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 1.3681 may open a clean path towards 1.3566 and may take a way down to 1.3340. Should 1.4022 prove to be unreliable resistance, the GBPUSD may raise upwards 1.4248 and 1.4363 respectively. Chart formation of bearish shark pattern in H4 chart favors prospects of a bearish trend. Engulfing pattern formation escalates the expectation for a bearish trend.