Fundamental view:

Pound traded low against the US dollar. US Central bank’s monetary policy announcement was the major catalyst in deciding the move of the pair this week. Federal bank has meet the expectation by keeping the rates and tapering unchanged and repeated that pandemic related financial support will end in March. The Fed Chairman Jerome Powell provided many hawkish signals in his press conference. He told that he will not rule out a rate hike in every meeting this year and also gave hint of March Liftoff. Tensions in the Russia-Ukraine front also remained elevated this week, since the diplomatic talks dragged on, while Russia is continuing its amassing troops. As of now, it is not clear on what President Vladimir Putin wants, However hopes that an invasion would be at least delayed until after the Winter Olympics in Beijing seemed to ease the market fears.

On the other hand, In the UK, politics is the main focus. Prime Minister Boris Johnson is being asked to resign and also a police investigation is called for, on top of an inquiry made by a civil servant. This political drama seems to pressure the sterling to some extent.

In this week, US Goods Trade Balance on 26^th January and US Initial Jobless Claims on 27^th January boosted uptrend whereas UK Markit/CIPS Manufacturing PMI on 24^th January , FOMC Press Conference on 26^th January and US GDP quarterly report on 27^th January boosted downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are US ISM Manufacturing PMI at Feb 01, US ADP Nonfarm Employment Change, EIA Crude Oil Stocks Change at Feb 02, BoE Interest Rate Decision, BoE Governor Bailey Speech, Initial Jobless Claims, US ISM Non-Manufacturing PMI at Feb 03 and US Nonfarm Payrolls at Feb 04. 

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.91% lower than the previous week. Maintaining high at 1.3565 and low at 1.3358 showed a movement of 207 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 1.3315 proves to be unreliable support then the pair may fall further to 1.3233 and 1.3108 respectively whereas a solid breakout above 1.3522 will open a clear path upward to 1.3647 and then will further raise up to 1.3729. Chart formation of bearish flag pattern in H4 chart favors prospects of a bearish trend. Dark Cloud Cover pattern formation escalates the expectation for a bearish trend.