Fundamental view:

Pound has initially rallied against the greenback but later fell closing with a weekly bear candle. In US inflation has eased.  Easing inflation allows Federal Reserve Chair Jerome Powell to insist that price rises are transitory and potentially delay the bank’s taper decision. UK Prime Minister Boris Johnson made a shuffling in his government, but left Rishi Sunak as Chancellor of the Exchequer, calming markets. The Prime Minister also decided to expand vaccine coverage ahead of the colder season as UK cases remain elevated, but hospitals are not suffering significant pressure. Amidst all the catalysts pound seems to be under pressure.

Britain Claimant Count Change on 14th Sep and Britain PPI Input monthly report on 15th Sep created uptrend whereas US Cleveland Fed Median CPI monthly report on 14th Sep and US Michigan Consumer Sentiment on 17th Sep created downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are UK Public Sector Net Borrowing, US Building Permits at Sep 21, US EIA Crude Oil Stocks Change, Fed Interest Rate Decision at Sep 22, BoE Interest Rate Decision, US Initial Jobless Claims at Sep 23 and Fed Chair Powell Speech at Sep 24.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.17% higher than the previous week. Maintaining high at 1.3912 and low at 1.3726 showed a movement of 186 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 1.3664 may open a clean path towards 1.3602 and may take a way down to 1.3478. Should 1.3850 prove to be unreliable resistance, the GBPUSD may raise upwards 1.3974 and 1.4036 respectively. Chart formation of head and shoulders pattern in H4 chart favors prospects of a bearish trend. Bearish engulfing pattern formation escalates the expectation for a bearish trend.