Fundamental view:

Pound has declined against the greenback but closed slightly below the open price. Monetary policy of Bank of England (BOE)  is cautious and not about to change until it is clear that the pandemic is no longer a threat to the economy. This might last through the winter flu season. Consumer prices are rising but the gains are nowhere near as dangerous as in the United States. Whereas The central bank is trying to cool down tightening expectations by saying that heating inflation will likely be temporary and resting on the tepid progress in the job sector which will help to maintain the ultra-loose monetary policy.

US Real Earnings monthly report on 11th August and US Import Price Index monthly report on 13th August created uptrend whereas US JOLTS Job Openings on 9th August and Britain Industrial Production monthly report on 12th August created downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are US NY Fed Empire State Manufacturing Index at Aug 16, UK Claimant Count Change, US Retail Sales monthly report, US Fed Industrial Production monthly report at Aug 17, FOMC Minutes at Aug 18, US Philadelphia Fed Manufacturing Index, US Initial Jobless Claims at Aug 19 and UK Retail Sales monthly report at Aug 20. 

 GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.44% lower than the previous week. Maintaining high at 1.3895 and low at 1.3791 showed a movement of 104 pips.

In the upcoming week we expect GBP/USD to show a bearish trend.  The currency pair is trading below the 50 Simple Moving Average and the MACD trades to the downside. A solid breakout below 1.3807 may open a clean path towards 1.3747 and may take a way down to 1.3703. Should 1.3911 prove to be unreliable resistance, the GBPUSD may raise upwards 1.3955 and 1.4015 respectively. Chart formation of diamond pattern breakout in H4 chart favors prospects of a bearish trend. Bearish engulfing pattern formation escalates the expectation for a downtrend.