Fundamental view:

Sterling has lost all of its summer bounce and is threatening to break back into its immediate post-pandemic range. Several factors have withered the appeal of the UK currency but the primary cause has been the risk-avoidance resurgence of the US dollar as the continuing economic impact of COVID-19 makes the August and September sterling optimism outdated. CBI Realized Sales on 24^th Sept and Britain GfK Consumer Confidence on 25^th Sept favored uptrend for the pair whereas Britain CBI Industrial Order Expectations on 22nd Sept, US HPI monthly report on 23^rd Sept and US New Home Sales on 24^th Sept favored downtrend for the pair.

The return of limited economic closures in the UK from rising COVID-19 cases and the rancorous Brexit talks are the major domestic weights on the pound.  And we expect pound to be weak against Dollar in the upcoming week.

The major economic events deciding the movement of the pair in the next week are, US CB Consumer Confidence Index at Sep 29, UK GDP quarterly report, US GDP quarterly report at 30 Sep, UK Markit/CIPS Manufacturing PMI, US ISM Manufacturing PMI at Oct 01, and US Nonfarm Payrolls at Oct 02.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.31% lower than the previous week. Maintaining high at 1.2966 and low at 1.2675 showed a movement of 292 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 1.2623 may open a clean path towards 1.2503 and may take a way down to 1.2331. Should 1.2914 prove to be unreliable resistance, the GBPUSD may raise upwards 1.3086 and 1.3205 respectively. Breakout of the pennant pattern in H4 chart favors prospects of a bearish trend. Shooting star pattern formation escalates the expectation for a bearish trend.