Fundamental view:

The British pound traded downside against the greenback. Fed’s Hawkish stance and Omicron variant worries seem to favor the US dollar. The Fed had signaled that it is ready to accelerate its tapering process. A faster reduction of bond-buys implies borrowing costs would move higher earlier than expected, perhaps in May. This hawkish comments from Powell , also further hawkish comments from his colleagues favored the dollar. The Discovery of new variant Omicron led to the sour market sentiment which in turn underpins the safe haven dollar bullish trend. Omicron is more contagious than previous variants, but uncertainty about lethality and vaccine resistance remains vague. Markets seemed to react to every piece of news: whether positive or negative. Talking about Brexit, no news is good news – but the lack of a resolution to the row over the Northern Irish protocol means it could always come back to impact  the pound.

Britain Markit/CIPS Manufacturing PMI on 1^st December and BoE MPC Member Saunders Speech on 3^rd December favored bullish trend whereas Fed Chair Powell Testimony on 1^st December and US Unemployment Rate on 3^rd December favored bearish trend for the pair in this week.

The major economic events deciding the movement of the pair in the next week are BoE Deputy Governor Monetary Policy Broadbent Speech at Dec 6, US Nonfarm Productivity quarterly report at Dec 7, EIA Crude Oil Stocks Change at Dec 08, Initial Jobless Claims at Dec 09, UK Manufacturing Production monthly report, UK GDP monthly report, Michigan Consumer Sentiment and US Federal Budget Balance at Dec 10.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.62% lower than the previous week. Maintaining high at 1.3370 and low at 1.3194 showed a movement of 176 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. Should 1.3159 proves to be unreliable support then the pair may fall further to 1.3089 and 1.2983 respectively whereas a solid breakout above 1.3335 will open a clear path upward to 1.3441 and then will further raise up to 1.3511. Chart formation of diamond pattern breakout downside in H4 chart favors prospects of a bearish trend. Bearish engulfing pattern formation escalates the expectation for a bearish trend.